John Bean Technologies Corporation Stock

Welcome to JBT Marel's Earnings Conference Call for the Second Quarter 2026. My name is Erin, and I will be your conference operator today. As a reminder, today's call is being recorded. [Operator Instructions]

I will now turn the call over to JBT Marel's Senior Director of Investor Relations, Marlee Spangler. Please go ahead.

Thank you, Erin. Good morning, everyone, and thank you for joining our second quarter 2026 conference call. With me on the call is our Chief Executive Officer, Brian Deck; President, Arni Sigurdsson; and Chief Financial Officer, Matt Meister.

In today's call, we will use forward-looking statements that are subject to the safe harbor language in yesterday's press release and 8-K filing. JBT Marel's periodic SEC filings also contain information regarding risk factors that may have an impact on our results. These documents are available on the IR website. Also, our discussion today includes references to certain non-GAAP financial measures. A reconciliation of these measures to the most comparable GAAP measure can be found on our website.

With that, I'll turn the call over to Brian.

Thanks, Marlee, and good morning all. First and foremost, we were very pleased with the continued robust demand environment in the second quarter. Orders increased 10% year-over-year and marked our third consecutive quarter with orders exceeding $1 billion reinforcing the strategic benefits of the JBT Marel combination.

By bringing together our complementary technologies, we are strengthening our ability to serve customers around the world. Contributing to the gain was double-digit year-over-year growth in our Prepared Food and Beverage Solutions segment, which was led by our value-added prepared foods technology. The strong orders also reflect the success of our synergistic cross-selling initiatives.

It is also clear that investment by the poultry industry remains solid and JBT Marel is uniquely positioned to benefit from investment across the entire upholstery value chain from primary and secondary processing through further processing and end-of-line solutions, allowing us to capture growth wherever our customers are investing.

At the same time, we continue to advance our cost synergy initiatives. As we have discussed previously, the majority of our synergy actions in 2026 and 2027 are related to supply chain and footprint optimization projects. As Arni will highlight, we have taken decisive actions to advance our footprint optimization strategy, allowing us to leverage our global scale and simplify our manufacturing and distribution network.

And as Matt will discuss, we are restructuring our warehouse automation business to optimize the cost structure and take advantage of product standardization to operate more efficiently. There were temporary and other factors that impacted our second quarter, which Matt will discuss.

Absent the net benefits of these factors, results fell short of our expectations in our Prepared Food and Beverage segment. That said, we remain optimistic about the short and long-term future of that segment.

At the same time, we are thrilled with the continued profitable growth of the Protein Solutions segment. Taken together, our backlog visibility, integration efforts and continuous improvement initiatives gives us confidence in realizing our second half 2026 forecast and achieving our longer-term financial targets, including an adjusted EBITDA margin of 20% in 2028.

Now let me turn the call over to Matt to provide an analysis of our second quarter and guidance for the remainder of the year.

Thanks, Brian. Second quarter consolidated revenue was $981 million, an increase of 5% year-over-year, which made up of 3% organic growth and 2% from foreign exchange. At the segment level, strong protein revenue of $467 million grew 11% year-over-year, which was 8% organic and 3% from foreign exchange.

Prepared Food and Beverage segment revenue was flat versus Q2 last year, which included an approximate 2% favorable impact from foreign exchange. Equipment revenue in the segment was short of our expectations due to a combination of logistics constraints and production inefficiencies resulting from our efforts to optimize our manufacturing footprint. At the same time, we are quite pleased with the segment's strong order and backlog growth.

Second quarter consolidated adjusted EBITDA of $168 million was impacted by the timing of equipment shipments described above and the following discrete items not included in our forecast. We recognized $17 million of EPA tariff refunds, which was partially offset by $4 million in higher-than-expected tariff expense associated with the prior years and $5 million in accelerated long-term incentive compensation expense.

We are operating in a higher inflationary environment as the pace of higher logistics, metals and other input costs put pressure on our year-over-year margins. That said, we have taken appropriate pricing actions to address these cost pressures. As mentioned, we are investing significant effort in optimizing our manufacturing footprint, primarily impacting the Prepared Food and Beverage segment. These efforts delayed some revenue recognition in the quarter and correspondingly weighed on margins.

We believe this short-term disruption is part of the transition to lower cost operations, which are critical to achieving our 2028 margin targets. At the same time, we took action to restructure our warehouse automation business. We have made significant progress in advancing our product standardization, enabling us to more efficiently deploy engineering resources and consolidate 2 facilities into 1.

These actions are expected to generate approximately $9 million in total annual savings, including approximately $3 million in the second half of 2026. While the Prepared Food and Beverage segment margins were disappointing, we expect meaningful improvement in the back half of the year, which is supported by our strong backlog visibility, pricing actions and operational improvement initiatives.

Meanwhile, adjusted EBITDA margins in the Protein segment improved year-over-year, even excluding the benefit from tariff refunds, primarily due to volume leverage in our poultry business as well as benefits from our synergy and continuous improvement actions across the segment.

During the second quarter, we also took a non-cash impairment charge to write-off intangibles associated with the 2021 acquisition of Prevenio within the protein segment. This impairment is a reflection of a shift in demand from Prevenio's value-added antimicrobial offering for poultry to a more commodity-based customer approach.

Moving to the balance sheet. We generated $179 million in year-to-date free cash flow, representing a conversion to adjusted EBITDA of 58%, and with leverage at the end of the quarter just below 2.5x, we are pleased that we are now within our target range of 2x to 2.5x after just 18 months after the close.

In terms of guidance, the actions we have taken in our operations are expected to improve production efficiency as we progress through the second half of the year. Therefore, we expect a steeper ramp in the fourth quarter results compared to the third quarter.

For the third quarter, we are guiding to a year-over-year revenue growth of 2% to 4% organic, partially offset by 1% FX impact. We expect adjusted EBITDA margins of 17% to 17.5%.

Given our record backlog, which provides visibility to over 90% of back half equipment revenue, coupled with our resilient aftermarket revenue and operational improvements within the Prepared Food and Beverage segment, we are maintaining our full year 2026 guidance for revenue and adjusted EBITDA. At the midpoint, that reflects consolidated revenue growth of 6% and adjusted EBITDA margin expansion of 145 basis points.

Finally, we have refined our adjusted EPS guidance to reflect updated assumptions for depreciation, amortization and our effective tax rate.

With that, let me turn the call over to Arni.

Thank you, Matt. As Brian mentioned earlier, we have made significant progress on cross-selling, allowing us to realize synergy orders of $45 million through the first 6 months of the year, and $75 million over the last 18 months. Many of our opportunities are in Prepared Foods, where we meaningfully strengthened our integrated offering through the JBT model combination.

For example, we secured a multiline order with a leading poultry customer. We leverage technologies from across the combined portfolio, including forming, coating, frying and heating, for branded fully cooked chicken distributed to the retail channels. This is a testament to the strategic benefits of the combination and to our enhanced value proposition with customers.

Additionally, as discussed at the top of the call, we continue to take decisive actions to optimize our operating footprint. To date, we have announced facility consolidations with a total of approximately 1.3 million square feet. This includes approximately 1.1 million square feet of manufacturing and distribution space and 200,000 square feet of office space and represents, in total, an approximately 15% reduction of our global footprint.

Nearly 80% of the manufacturing space reduction is associated with the Prepared Food and Beverage segment as we focus on that segment's full margin potential and other opportunities do remain. For more than just the reduction in square footage, the footprint optimization allows us to take advantage of our scale, reduce complexity, and utilize low-cost operating capacity across our global network, such as in Eastern Europe, Brazil and India.

As a result of these initiatives, we expect to record a cash benefit on the sale of real estate assets in 2027 or 2028. In terms of the P&L effect, we expect these initiatives will deliver annualized savings of approximately $25 million to $30 million by 2028, while exceeding our original estimated savings of $10 million to $15 million. Of these anticipated annual savings roughly $4 million to $5 million is embedded into our 2026 forecast.

Let me now turn the call back to Brian.

Thanks, Arni. We are pleased with the progress we are making on our next-gen strategic initiatives. The strong market reception to our integrated and full-line solutions demonstrates the differentiated value proposition we provide to customers and our cross-selling capabilities. We are in the early innings of deploying our customer-first service initiatives, which combined with the global reach and digital offering, are expected to deepen customer engagement and support our goal of increasing our aftermarket wallet share. We continue to make progress on our cost synergy initiatives.

As Arni articulated, one of the most significant benefits of the JBT Marel combination is the flexibility to leverage our global scale and relocate production from higher cost and underutilized facilities to our most efficient lower cost operations. These footprint optimization initiatives are just one of the many levers we have to capture the value creating benefits of the business combination.

Supply chain optimization is another pillar as we consolidate our purchasing and execute value-add engineering projects to lower the cost and complexity of equipment and achieve further standardization of parts and subcomponents. And while the tariff environment has made these efforts more challenging, it has also motivated us to accelerate the localization of the European supply chain to the U.S. to better serve the U.S. domestic market from a lead time and cost perspective.

All told, we are demonstrating the industrial logic of the JBT Marel combination. This pool of opportunities enhances confidence in our ability to deliver our profitable growth objectives and our target of 20% adjusted EBITDA margins in 2028.

Before we take your questions, I'd like to thank our team. It is their commitment and hard work every day that has enabled us to make such significant progress on the integration of JBT Marel and positions us as a stronger partner to our customers around the globe.

Now let's open the call to questions. Operator?

[Operator Instructions] And we will take our first question from Mig Dobre.

Just maybe a little bit of clarification on the guide and your thoughts here on Prepared Food and Beverage. I'm curious as to how you think about the margin cadence relative to what we have seen in Q2. So you've done 17.5% in Q2. How do we think about Q3 and Q4, given everything that you talked about in terms of footprint consolidation, some of the challenges that you had in Q2? And then, is there some sort of a catch-up that we need to consider here in terms of revenue that got pushed out from Q2 into either Q3 or Q4, how do we maybe frame that as well?

Yes, Mig, it's Brian. I'll start and then I'll hand it off to Matt to talk a little bit about the margin cadence. So when you think about the revenues in the second quarter, you exclude the impact of FX. I would say, we were short about $20 million in revenue in the quarter, all of which being in the Prepared Food and Beverage segment.

And if you take a look at that, about half of that was I would say, from delayed associated with logistics availability and the other half associated with some of these production inefficiencies with some of the moves we're making within our facilities. So that $20 million, we do feel is really just changes the cadence moving from Q2 into Q3.

And then obviously, we're trying to be very thoughtful in terms of the Q3 guidance to account for any other inefficiencies that we see or any other logistics challenges. So we've essentially redistributed that $20 million across the back half of the year that obviously, that $20 million obviously comes with a margin impact in the quarter, again, which certainly hurt the PFB margins. So typically, we look at somewhere in the range of flow-through on margins of 25%, sometimes 30%. So it was, I'll call it, a $5 million, maybe $6 million impact on EBITDA just from the revenue. And again, that will flow through here in the back half. So in terms of the margin cadence on PFB, I think Matt can give some color there.

Yes, Mig, I think what we expect to see in Q3 for the Prepared Food and Beverage segment is about a 25 to 50 basis point sequential improvement -- sorry, year-over-year improvement from Q3 of last year year-over-year. And then we expect to see improved margins from Q3 to Q4 probably around another 100 basis points or so. So you can see the sequential improvement from Q2 to Q3 to Q4 as we work through some of these inefficiencies and see some benefits from the higher volume.

Okay. That's helpful. I mean, that would suggest that in Q4, you would have pretty significant margin expansion in this segment year-over-year, which I guess is good to hear. And then maybe my follow-up, sticking with margins here. Protein had much better margin than I was anticipating, but presumably, there's a good chunk contribution from the EPA refunds, maybe you can clarify that. And a similar question here, how do we think about margins in the back half?

Right. So you're correct that the -- I think it's 24% margins for protein in the second quarter. There was, I would say, about 200 basis points impact from the tariff refunds. So they've been running at about -- in that low to mid-20s. We would expect that general cadence to continue through the back half keeping in mind that they have a higher mix of -- so it would be relatively flat for the back half of the year.

And part of the reason is they'll have a higher mix of equipment versus aftermarket. So the mix is changing a little bit. And as you know, the flow-through on the equipment is a little bit less than the flow-through on some of the aftermarket. So they'll be relatively flat in the back half.

And by the way, just generally speaking, in terms of the -- going back to PFB and the margin progression, keeping in mind that we are going to start to see some of the benefits of some of these facilities combinations as well as the AGV restructuring that Matt mentioned in the prepared remarks. So that's part of the reason why you're seeing maybe a faster ramp-up than you might otherwise expect.

And we will take our next question from Justin Ages with CJS Securities.

You mentioned ongoing strength in poultry. I was just wondering if you could elaborate on some of the strength in Protein Solutions outside of that poultry category?

Yes. So we have pork, beef fish and poultry. Poultry is, certainly, the largest segment and continues to show strength. We're particularly excited about some of the investments we're starting to see on the Prepared Food and Beverage side -- sorry, the Prepared Food side. You probably heard from some of our customers speaking about some of the investments we're making there, so we saw some really nice progress there. And that's actually within the PFB segment.

But specific to the Protein segment, we do expect continued investments even on the primary and secondary side of poultry. And on the fish side and on the pork side, I would say, continued modest strength. It's not robust, the way we've seen from poultry. However, as beef prices continue to be high, pork and fish become alternatives from a consumer perspective, and we are seeing some decent volume there. So the backlog and the orders were fairly strong in the second quarter and outlook is generally positive.

The weakest part by far is the beef side, right, given the the lack of cattle inventory for the processors. So we're not seeing much in the way of investments on the beef side. So that's the weakest for sure. And it's -- and just for your reference, beef is less than 5% of our Protein Solutions portfolio.

That's helpful, Brian. And then you mentioned outside of the restructuring in the AGV business, you mentioned that the business itself was improving, I think, in the deck. So just wanted to know if you can give us an indication if you're seeing that continuing like beyond 2Q, is that improvement being sustained?

Yes. Specific to Prepared Food and Beverage, indeed, yes. Again, we are seeing a lot of strength in what we call -- when you think about our PFB segment, it's Prepared Foods, it's Diversified Food and Health and its AGV. Clearly, from a demand perspective, that Prepared Food side is quite strong. And again, I think this is largely on investments not only from the poultry segment, but also other segments, including pork, et cetera.

The other thing I would mention is within that segment, AGV had its strongest quarter in 6 quarters on volume. So as you may recall, AGV was a little bit more -- a lot more impacted on the volume side from some of the disruptions from the tariffs as folks pulled back on some of their warehouse automation. And that seems to be behind us, again, an extraordinarily strong quarter. And that increased volume that we expect in the back half, along with the restructuring has a nice ramp-up of AGV in the back half, which to be frank, was disappointed in the second quarter, while AGV saw some improvements from the first quarter to the second quarter as we had hoped it just didn't reach the levels that we had anticipated, again, in part some of the motivation for some of the restructuring. But again, that, coupled with the higher volume is -- should have a nice ramp-up here in the back half of the year.

And we will take our next question from Ross Sparenblek with William Blair.

Maybe just starting with pricing actions. Can you remind us where we stand in the backlog from the 2025 actions? And then how we should think about the impact of this inflationary cost and the catch-up of additional pricing actions throughout 2026?

Yes. So I would say the -- when you think about the backlog, that's obviously 90% of the backlog is on the equipment side. And the pricing actions that we saw in the back half of last year and earlier this year associated with kind of known costs. So as we quote each project, we have known costs for goods and materials. So that's embedded into the numbers.

And again, I do think that is reflected in the margin guidance that we have. I will say, in the current environment, we are seeing a fair -- a lot of inflation on logistics in particular. And I do think we didn't recover all of that in the second quarter. And so a little bit of leakage there for sure.

If you think about logistics, we spent more than $100 million a year in logistics. And call it, 60%, 65% of that is on inbound logistics and intercompany logistics. That's a little bit harder to -- obviously, to pass through. Outbound logistics, we do pass through kind of to our customers as we go. So we do see a little bit of pressure there and a bit of a lag between the cost that we're seeing and the pricing actions that we've taken here in the second and third quarter. Again, all this is reflected in the updated guidance.

Okay. No, that's helpful. And when we think about the guidance, I mean, it sounds like the sensitivity around 2026 on the top line remains just, I guess, this logistics issue. I mean orders are strong. The backlog is pretty much covering 2026, so we have more pricing offset. I'm just trying to think through some of the caution on why we didn't see even a slight guidance range for the year -- or guidance increase for the year on the top line?

I think we're being -- given those logistics issue, and we're still moving things around some facilities to that, we thought it was really appropriate to just keep the guidance as is given a little bit of the pressure we saw in the second quarter. So we have a bit of a makeup in the third and fourth quarter from that, miss in the second quarter. However, you are right in the sense that our backlog is -- it's at record levels, both Protein and PFB segment have great backlogs. We're looking forward to as we get more efficient, that we get better flow-through on that. However, again, given the second quarter, we felt it was prudent to keep the revenue guidance flat for the year.

And we will take our next question from Walt Liptak with Seaport Research.

I wanted to ask about some of the U.S. industrial environment is getting better, the ISMs are moving up and that seems to be sort of -- you guys have been in a pretty good place with new orders, and it looks like second quarter was pretty good, too. Do you -- are you guys in a different cycle? Or is that sort of general industrial trends somehow beneficial for your outlook too?

Certainly, Food Production has somewhat of its own peculiarities, right? I think there is a very, very strong backdrop of protein consumption going on right now. And so I do think that in itself is a bit unique for our industry. I do think some of the pro-growth initiatives that are supporting the overall economy are good for us, right? When you think in a reasonably -- reasonable interest rates, et cetera. So I just generally think that a strong economy is -- provides confidence, but I do think this protein trend is particularly strong for us.

And for your benefit. About -- when you include the protein exposure we have within our PFB segment, about 70% of our overall revenues are associated with the protein market. So I do think that's been quite helpful. And then there are -- within our businesses, you still see some other pockets of weakness that buck the overall, I'll say, industrial trends because some of the CPG companies are a little bit weaker right now, but the benefit of JBT Marel with our broad portfolio, we're there to provide support wherever our customers are investing. And right now, it happens to be very strong in proteins across both Protein segment and the PFB segment.

Okay. I appreciate that. And then with the factory consolidations, those relocations are extremely difficult. So timing issues, I guess, that's totally understandable. When do we think that the consolidations are done? Do you have them completed by the end of the year? Or is it into 2027?

Sure. There will be a phase in, right? We started some here in the second quarter. There's another one wrapping up here in the back half of the year. And then two facilities are -- I'm talking larger facilities will happen in 2027. One will be done by mid-27 and another one by the end of 2027. So I would say it's phased-in approach. Obviously, it partially depends on the local laws dealing with works councils, et cetera, as well as being -- have a -- I'll say, a moderate pace that does not overwhelm the receiving plant, I think that's an important consideration.

Again, we saw a little bit of pressure on the receiving plant here in the second quarter. We're trying to be very thoughtful about that. I think one of the nice benefits of the plants that are being moved -- going forward here, is that the receiving plants are already manufacturing these products. So that helps out quite a bit. So it's more of a consolidation into someone who already has that knowledge. But that said, this is going to be a phase in all the way through the end of 2027.

Yes. I think that's an important differentiation to make is that the experiences that we're having right now and the consolidation of some of the footprint is moving product to plants that haven't produced that product yet or before versus what Brian just said about the moves in 2027, that is really more of a consolidation of production into one facility so that the transition is going to be a lot smoother in those 2027 consolidations versus what we're experiencing in Q2 and Q3 of this year.

Okay. Great. And then maybe a final one for me. On capital allocation, you guys announced a share buyback of $200 million. Can you talk about the buyback versus M&A deals or what you're seeing in the environment?

Yes. I think, Walt, we're still really focused on the integration of the 2 companies. And so M&A is still something that's in the future. And so with the buyback that was announced in Q2, we are able to sort of choose between debt paydown and share buybacks. And we've chosen to do some share buybacks where it makes the most sense opportunistically relative to the price of the market versus what we expect the price to be. So -- that's why we made some of those share buybacks in the quarter, and we'll continue to be opportunistic going forward and make the decision in the medium term -- short to medium term, between debt paydown and share buybacks.

Yes. And it's Arni here. I mean what we've also talked about is not only a balance sheet question. It is the management capacity. And like Matt said, we're laser focused now on maximizing the benefits of the combination of JBT and model. We spoke about all the work that we're doing. There's still a lot of work on the footprint in other areas. So -- we're really focused on that. But we do believe and anticipate there will be a time where M&A will be a lever to really accelerate our kind of strategic journey and strengthen the offering that we have.

And we will move next to Ian Zaffino with Oppenheimer.

On PFB, not to kind of beat a dead horse here, but what are your customers seeing as far as their end customer demand? What are they saying maybe about the the state of the consumer, they feel good. Because I know you gave us a lot of commentary on your customers, but maybe you could talk a little bit about your customers customer?

Yes. I would say it is very mixed. Again, I think on some of our CPG customers, they are seeing some trade-offs from maybe higher branded products to more of the generic products, et cetera. So there's definitely a fair amount of activity at the consumer level. And again, it does depend on the category. And you still even have some GLP-1 impacts, which is net positive for us, given the protein focus.

But in some categories like snacks and suites, you're seeing some shifting of consumer behavior. I think the thing that we hear a lot from our customers in terms of where -- how they're focused on the consumer is that they need to be responsive in terms of product innovation, different sizing, different flavors, even adding some of this protein aspect to some of the different offerings. So there's a fair amount of noise and churn happening.

However, with a, I'll say, general strong backdrop with quite a bit of our customer focus again with 70% plus exposure to protein. We're net good in that regard. But I do see -- we still see a fair amount of noise on the CPG side that I think will take some time to settle out as inflation works its way to the system.

Yes. And just to add a little bit, like on the consumer side, customers on the protein side have been very specific that they still see good demand. And what you tend to see is like consumers don't stop consuming protein. That's why it's such a great category. It's more around optimizing within protein. And that's where we have kind of good exposure and diversification across the different kind of protein segment. So that's a pretty good kind of spot to be in.

And then, the other trend that we see is there's more value added, more prepared foods and we're seeing kind of that side of the market also picking up and kind of our customers are talking about that, which should help our Prepared Food and Beverage segments, just like we saw on the order side in Q2.

And then -- can you guys maybe give us an update or some color on where the USDA is as far as speeding up the inspection lines for chickens. And what does that actually mean for you guys as far as addressable market or opportunity? Any specifics you could give us there would be helpful.

Sure. Yes, we've been -- we do converse with the USDA. We're obviously a proponent and have given our white papers, if you will, to them and answered a lot of questions to the USDA about the line speeds. What we currently hear or I understand is that we'll expect some kind of decision either late summer or early fall. Obviously, we're talking about the government, so you never know precisely where they stand, but that's our current expectation.

And then just in terms of the benefits, I think one thing to understand is that the U.S. line speeds, which are currently at 140 birds per minute versus I'm talking poultry and with waivers 175 birds per minute. That compares to Europe of 240 birds per minute on average at the lines front. So -- the U.S. is at a fairly distinct disadvantage from a productivity perspective.

So with over 350 lines in the U.S. and call it, less than 20% of them are running at 175 birds per minute. There we would expect a fairly durable cycle, and it will take multiple years. This will not all happen in 1 year or 2 years. This will be, I would say, a tailwind for multiple years. if we get this permanent 175 instead of needing to get to 175 with waivers. So we are hopeful and excited about what that means for us. And hopefully, we'll see a decision here sometime in the third quarter.

Just to highlight, like our value proposition is much stronger as the speed up the line is higher. So kind of generally, that's -- because we have the leading technology and are able to operate at that level that really kind of helps us in terms of from a kind of a value proposition standpoint.

And a differentiation versus our competitors.

[Operator Instructions] We'll take a follow-up from Mig Dobre with Baird.

Just one quick question for me. And Brian or Arni, when we're kind of looking at orders here over the past 3 quarters, they've been actually remarkably consistent right between $1.30 billion and $1.70 billion. And I guess one of the concerns that I keep hearing about is this notion that we've had a pretty big investment cycle in poultry. And eventually, that's going to kind of run its course.

So I'm curious how you think about this going forward in terms of visibility that you have on orders. And as you kind of think about 2027, for instance, is there a mix shift that maybe we should be thinking about here between the two segments, maybe away from Protein Solution and maybe more towards Prepared Food and Beverage, where at least from your comments, it sounds like demand and orders have actually picked up. So any context here, I think, would be really helpful.

Yes. And so I'll give you a little bit from our customers' point of view. And there is a lot of poultry demand in general right now, by far, the #1 protein and we may even see poultry sell more per capita than beef and pork combined at some point. So we are seeing the very strong trends. So there's an underlying backdrop of absolute demand on the poultry side. So I do think that general trend is good for us on the primary and secondary side. But you're right, there's been a tremendous over the last year or so investments on that primary and secondary side.

And what I would tell you is the second quarter, the Prepared Foods side has now lapped the primary and secondary side in terms of investment. So we -- in our Prepared Foods business, it was about 15% order growth year-over-year. So it was really quite strong. And I think this is -- if you listen to the earnings calls from our customers, you hear about how they're shifting some of that commodity-based volume to added value volume into their prepared food side.

So we saw some really nice projects out of that here in the second quarter, and it even started in the first quarter. And that pipeline is quite strong from here. However, given the overall backdrop of the demand for protein, the primary and secondary pipeline is actually quite strong, too. And it's global. I think that's one important consideration also as different regions want to become more self-sufficient in terms of protein production.

We do see some other shifts from export, import and people wanting to be self-reliant. So as we sit here today, one, we have backlog going well into 2027 and the pipeline remains strong. So we feel very good about 2027 on the protein side.

And this does conclude the question-and-answer session. I'd like to turn the program back over to Mr. Brian Deck for closing remarks.

Thank you all for joining us this morning. As always, our Investor Relations team is available if you have any additional questions. Thank you.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Welcome to JBT Marel's Earnings Conference Call for the First Quarter 2026. My name is Ben, and I will be your conference operator today. As a reminder, today's call is being recorded. [Operator Instructions] I will now turn the call over to JBT Marel's Senior Director of Investor Relations, Marlee Spangler to begin today's conference.

Thank you, Ben. Good morning, everyone, and thank you for joining our first quarter 2026 conference call. With me on the call is our Chief Executive Officer, Brian Deck, President, Arni Sigurdsson; and Chief Financial Officer, Matt Meister.

In today's call, we will use forward-looking statements that are subject to the safe harbor language in yesterday's press release and 8-K filing. JBT Marel's periodic SEC filings also contain information regarding risk factors that may have an impact on our results. These documents are available on our IR website. Also, our discussion today includes references to certain non-GAAP measures. A reconciliation of these measures to the most comparable GAAP measures can be found on our IR website.

With that, I'll turn the call over to Brian.

Thanks, Marlee, and good morning all. We got off to a solid start in 2026. We demonstrated our commercial momentum with a second consecutive quarter of orders exceeding $1 billion, including continued robust global demand from our poultry customers. We captured meaningful year-over-year margin expansion, enabled by further synergy savings and strong execution. Additionally, cash flow was extremely strong, allowing us to make further and significant progress in reducing our financial leverage. As a result, we remain confident in delivering our original earnings guidance for the year.

Before we talk more about the first quarter, I'd like to thank everyone who is able to participate in our Investor Day in late March. It was an important milestone for JBT Marel as we unveiled our next-gen strategy and detailed our 2028 financial targets. And as we discussed, we are very pleased with our progress integrating JBT and Marel which underscores the commercial, operational and financial benefits of the combination, and provides confidence in the journey ahead.

I'll now turn the call over to Arni to provide details about our next Gen strategy. Then Matt will follow up with a financial cap on our first quarter performance.

Thank you, Brian. At our Investor Day in March, we detailed our plans for profitable growth and continued margin expansion through 2028. Our food and beverage customers are shifting to an outcome-based model that increases the demand for integrated solutions across the value chain and requires full life cycle support, high uptime and data and processing insights to run at the highest performance level. JBT Marel is uniquely positioned to deliver these comprehensive solutions and our next-gen strategy will strengthen our competitive position even further.

The key pillars of the next-gen strategy are, first, advancing our customer-centric service model by building on our large global installed base, to deliver a better customer experience through prescriptive maintenance, improved parts delivery performance and more regional accountability. Second, it is enhancing our product offering full-line solutions and digital capabilities with targeted innovation through our food application expertise. Third, it is capturing commercial opportunities through cross-selling and growth in emerging markets, and delivering end-to-end solutions that optimize customer performance.

Then, of course, our culture of continuous improvement will further enhance the efficiency of JBT Marel, allowing us to invest in the business and be more competitive. And finally, at the right time, we plan to pursue strategic and disciplined M&A to build an even more comprehensive offering and strengthen our value proposition of integrated line solutions.

Putting this all together, we expect our revenue to grow at a 3-year organic compound annual rate of 5% to 7%. And we are targeting an adjusted EBITDA margin of 20% in 2028, supported by our margin enhancement initiatives and volume growth. We're confident that our strategy positions us to deliver profitable growth and value creation for both customers and shareholders. And we look forward to updating you on our progress.

Now let me turn the call over to Matt to discuss our performance in the quarter.

Thanks, Arni. As Brian mentioned, we're off to a good start in 2026. Our first quarter consolidated revenue was $936 million, an increase of approximately 10% year-over-year. Organic revenue growth was 4%, with foreign exchange contributing additional 6%. Consolidated adjusted EBITDA of $142 million improved 27%, and adjusted EBITDA margin of 15.2% improved by 210 basis points.

From a significant -- from a segment perspective, Protein Solutions revenue of $460 million grew 22% year-over-year, which included an approximately 8% benefit from foreign exchange. Organic growth was primarily due to higher poultry volume as we executed on strong backlog built in 2025. Protein Solutions segment adjusted EBITDA margin improved by more than 500 basis points year-over-year to 21.7%. This significant improvement was driven by large -- by volume leverage in poultry and the results from synergies and continuous improvement initiatives in our meat and fish businesses.

Prepared Food & Beverage Solutions segment revenue of $476 million was flat year-over-year, which included an approximate 4% benefit from foreign exchange. As we've discussed on previous calls, we experienced softness in the CPG end market during 2025, which contributed to the lower volume. Adjusted EBITDA margin for the segment declined 170 basis points year-over-year to 14.7%, which included the expected impact of higher tariff costs, the volume decline and underperformance in the warehouse automation business.

For the quarter, we generated free cash flow of $100 million, driven by our earnings performance and an increase in customer advance payments from our strong order intake. This resulted in free cash flow conversion to adjusted EBITDA of 70%. We continue to make great progress deleveraging our balance sheet, with our leverage ratio at 2.6x at the end of the first quarter. We remain on track to reduce leverage to approximately 2x by year-end.

Given our first quarter performance and strong orders, we are maintaining our full year 2026 guidance. At the midpoint, that reflects revenue growth of 6% [indiscernible] EBITDA margin expansion of 145 basis points, and an adjusted earnings per share improvement of 29%. For the second quarter, we anticipate revenue of $975 million to $1 billion, and adjusted EBITDA margins of 17% to 17.5%.

Now regarding the impact of tariff changes on our guidance. We are forecasting that the benefit from the elimination of [indiscernible] tariffs will be essentially offset by incremental Sections 122 and 232 tariff increases. Additionally, we have not factored in any [indiscernible] tariff payment refunds. Therefore, our full year guidance remains unchanged and continues to reflect a 25 to 50 basis point headwind from tariffs after all mitigation actions.

With that, let me turn the call back to Brian.

Thanks, Matt. Speaking of the outlook for JBT Marel, let me comment on our commercial momentum. As I mentioned at the top of the call, orders exceeded $1 billion in the first quarter, a year-over-year increase of 17%. That gain reflects continued robust demand from our poultry customers globally, driven by unabated demand from end customers. And beyond poultry, the benefits of our diversified model are also playing out with broad-based order strength, as we experienced double-digit year-over-year growth from both our Protein Solutions and Prepared Food and Beverage segments.

Specifically, we saw a pickup in investment in Prepared Foods, as well as the meat and food and vegetable end marks. Geographically, investment was strong in most regions with a sequential increase in demand from Europe, North America and Latin America. Additionally, we continue to capture synergistic orders as our go-to-market strategy promotes cross-selling of legacy JBT and Marel solutions.

As it relates to the conflict in the Middle East, we are not experiencing any noteworthy impact on our order book and pipeline. As a reminder, the Middle East region has historically accounted for less than 5% of total JBT Marel revenue. But even today, we continue to progress on opportunities in the region. Moreover, we have not seen an impact to broader customer investment trends in Europe, as the demand to meet the needs for protein output automation and efficient operation continues.

However, the conflict is resulting in a more challenging logistics, fertilizer and energy inflationary environment, which heightens our attention to any implication for these cost dynamics for both JBT Marel and our customers. So far, it seems our customers remain confident in their ability to pass these costs along or otherwise manage through them.

With all this said, our teams are executing well despite the dynamic macro environment, which speaks well to our prospects for the remainder of 2026 and beyond. Thank you to our talented people across the globe for making it possible.

Now let's open the call to questions. Operator?

[Operator Instructions] Your first question comes from the line of Ross Sparenblek with William Blair.

This is Sam [indiscernible] on for Ross. Really great to see the strong orders in the quarter. I mean, you guys touched on this, but we have been hearing some concerns that input cost inflation may have been impacting your customers' willingness to order. Can you maybe walk through how this current inflationary trend compares to 2022?

Sure. Happy to do so. So two things. I would say, first, specific to our poultry customers, they are in a much stronger position today versus a few years ago with excellent customer demand, down supply, good price cost spreads and strong balance sheets. More specifically, corn and soybean are in abundant supply and remain in that low-cost position here in 2026 versus high prices in 2022, which if you recall, were exasperated by the Russia Ukraine conflict.

And wholesale prices for poultry today are -- while [indiscernible] highs are still at a level where producers are making really nice money. And in part -- you saw the [ Tyson ] report yesterday, nice quarter. And again, balance sheets remain strong, and there's still a continued bias towards investment in all the things that we've talked about.

I'd also say from JB specific -- to a JBT Marel standpoint as a combined company, we really now have the benefit of a more diversified product portfolio within poultry, because now we have primary, secondary, all the way to end of line, and including a much deeper further processing portfolio, and we're seeing a lot of investment further processing coming along. But also, remember, we've got much broader end market exposure outside of proteins, a better mix of recurring revenue, a broader geographic, and a broader geographic exposure. Additionally, if you recall, back in 2022, 2023, Marel meat and fish, they weren't really contributing much to the situation from an earnings perspective. And now while we've got a lot of room to go on those businesses, they're both contributing nicely. So we're simply more diversified financially as well.

Really, what I'm saying is the combined benefits of the scale and diversification of both the product and the market side. We've severely derisked the company compared to where we were in the past. And that was a big part of the industrial logic of the two businesses coming together. So while -- I'm not saying that we're immune to cyclical forces, I'm just saying we're a better business today and more diversified than we were back down.

Got it. That's super helpful. And kind of sticking on the same theme, has your ability to internally pass through your own inflationary costs meaningfully changed since 2022 following the Marel acquisition?

I would say, generally, we're more competitive than we've ever been by virtue of just our continuous improvement efforts, and we have strong market positions. So yes, I think we do have a good ability to pass things along. We're obviously very conscious of where we sit in the marketplace from a competitive pricing situation. So that always comes into play. But certainly, we feel we're in a good spot generally.

And maybe just to add a little bit because like if you look at kind of maybe more specifically to the end markets that Marel was focused on back in 2022, there was basically a perfect storm. There was like a headwind in most of our markets. If you look at the pork business, obviously, the war, with the sanction on Russia, and kind of the Ukraine market closing down, that was a north of 10% of the meat business at the time. But what was also happening, which was an extra headwind was that China really cut down on their imports of pork because they were built -- kind of, China was building up the hurt after the African swine fever. So there was an oversupply of pork in Europe and North America, kind of independent of what was going on, from a cost standpoint.

The beef cycle was turning at that point kind of to a more negative environment. And then on the fish side, you were seeing quotas being cut for the first time for a few years on the whitefish side. And Norway introduced a 40% tax on salmon farming, which is close to 50% of the salmon farming in the world. So there was also just like a very specific dynamics if you were looking at, kind of, Marel specifically at the model business back in the day. But like Brian said, we're a different company and much stronger from a scale, from a diversification standpoint, not only from an end market standpoint, but also across kind of the value chains in those end markets.

Your next question comes from the line of Justin Ages with CJS Securities.

I was hoping you could get a little more color on some of the headwinds in prepared food and beverage solutions. What's causing these persistent headwinds and warehouse automation?

Well, I think in warehouse automation, specifically, that business had a bigger impact from the tariff changes on its customers than the rest of our business did. So they've been really impacted by demand because of the impacts on its market. And they've also had a few discrete projects that they've been working through over the last 2 quarters. We think that's largely behind us now. And the business is taking some actions to try to address the lower volume and improve margins going forward. And we should expect those actions to start to impact late here in Q2, and then going on to Q3 and Q4.

And then switching to poultry. Good to see strong robust demand it possible to get a little more color on where that is geographically? Is it broad-based in all your regions? Is it specifically in one region, leaving an opportunity to grow more in another region? Just looking for any color there.

Sure. So the demand is fairly broad-based. The -- Europe is strong. North America is, I would say, even a little earlier in the cycle than the European cycle. And we expect continued demand there, especially with some of the opportunities with [indiscernible] speeds and whatnot. So I would say they're actually earlier in the cycle than Europe. And in South America is very strong for us right now. We may have a record year, this year down there. I would say Asia is a little earlier or a little not as quite strong, but good opportunities, especially in the Australia, New Zealand area.

[Operator Instructions] Your next question comes from the line of Mig Dobre with R.W. Baird.

Brian, just maybe tacking on to those last comments that you had on poultry. I'm sort of curious as to what your visibility is here at this point, right? I mean we -- just in speaking with investors, I think this is, kind of, like the primary concern that we've had a pretty decent poultry cycle here going for more than a year. And the question is kind of on sustainability.

Maybe you can talk a little bit about that and what you're hearing from customers? I mean, what is driving this investment? And can you put a finer point on what's happening with the line speed, in terms of how that manifests itself in incremental business for you guys in terms of orders either for 2026, or maybe even beyond 2026?

Sure. From a demand profile, there's a couple of things happening in [indiscernible] There is a true insatiable demand for [indiscernible] right now just in terms of all the benefits that go along with incremental -- the protein aspect to it. The flexibility and flavor profiles, religious. I'll say no restrictions there. As well as the continued progression of people going from grain-based diets to meat based diet. So this secular tailwinds continue to benefit, and I think that will go on for a long time.

And now that the -- I'll say the industry got the supply-demand balance fixed after their struggles 2023 through early 2024. We're just in, I'll say, more normal cycle in that regard. And I would further say that the most recent, I'll say, demand -- real strength has been on that primary and secondary side, which is really supporting automation but also just the pure volume needs for the industry.

As we go further into the cycle, what we're now seeing is the need and desire for some of the downstream [indiscernible] further processing. You heard that a little bit from [ Tyson ] yesterday where there's -- we do expect some real strength there here later in the cycle, as they look to do value-added to their portfolio and because they make more money in that regard. So I do think we're going to see some strength in that side over the next several quarters.

Sorry, what was the second part of the question?

[indiscernible]

Line speeds and line splits. Yes. So we're still waiting for the USDA to make final determination, which we expect here in the next few months. The open comment period has now since closed. We met with the USDA giving our opinion on the matter and put forth our comments. And our position on this is that our technology and the line speeds, they're built for the higher line speeds, which we currently use in Europe and elsewhere. And really the line speeds in North America are constrained on productivity and our -- it actually increases food costs.

So -- but what would manifest if we see some success on the line speed rules is we immediately go from 140 [ birds ] per minute to 175, and that would precipitate investment all around -- you don't just turn the switch and make it go faster. The entire system has to be harmonized in order to get the productivity that you need in order to execute on that. So the [ shackle lines ] themselves, but everything around that. The deboning, everything associated with that. We think that's an opportunity.

And even without, I would say, the waivers, we are still seeing demand for line splits, which effectively allows the increased speeds under the current rules of 140 birds per minute where you put the line where the USDA inspection occurs to slow it down for a period, and then you join those lines back up. So we actually had a deployment in Q1 in that regard. So that was nice to see, one of our customers deploying that. So we do think independent of of what the USDA decides. We think there's some opportunity to invest, which allow our customers to get that productivity regardless.

Okay. Is it fair to think about this line speed issue as just, kind of, fundamentally altering the poultry investment cycle in North America? Or is this something that perhaps doesn't really have that much of an impact in -- for the overall [indiscernible] I'm talking about here?

I -- this is one of the reasons why I mentioned we're earlier in the cycle in North America compared to Europe, because Europe has been at these higher speeds. I think this is a multiyear investment opportunity because of the 300-or-so processing lines out there, only handfuls are running at higher speeds. So we do think this is a longer cyclical tailwinds specific to North America.

It is kind of -- how [indiscernible] can think about it, as kind of a transformation because all the infrastructure around kind of the farming side, ensuring supply. And the current facilities are not necessarily set up in the right way to deal with, kind of, the technology that you need and the speed and so on. So it will be, kind of, a gradual shift in the market, we believe. So it is not, like Brian said, it's not like you buy one piece of equipment and you swap it out. It's really -- you need to think about it much more broadly. So it has -- it will take time to progress over the whole industry.

That's very helpful. And maybe one final follow-up on Prepared Food & Beverage segment. It sounds like demand is getting a little bit better. You talked about some challenges in '25, but demand gets a little bit better. How should we think about organic growth here in terms of what's embedded in guidance? Maybe you can comment on Q2 specifically and then the rest of the year as well?

And how do we also see margin progress? We started clearly slower in Q1. Do we revert to some year-over-year margin expansion at any point in time in fiscal '26?

Sure. I'll speak and Matt will talk specifically about some of the trends here. But we are seeing some, I'll say, recovery in some of those end markets that were a little bit more challenged in 2025. So some of the CPG, QSR we are starting to see an improved pipeline and that manifested in strong orders in Q1, which is nice to see.

Yes. Just to add on that, I think we saw close to double-digit order improvement in Prepared Food and Beverage in Q1. So that's the positive momentum that we're seeing in the -- in the segment overall. From an organic growth rate, it will be, sort of, in that, call it, sort of mid-single digits, probably a little less than the average that we're looking at for the total business at 6% [indiscernible] our midpoint. It will be higher in protein, a little bit lower on the prepared food and beverage side, probably closer to 3% to 4%.

Especially given the slow start, right?

Correct, in Prepared [indiscernible] Beverage side. So it's -- so I would see it. But it's going to progressively improve because we have built some backlog here in Q1, and we're starting to see positive momentum in their primary markets.

And the margins?

Yes. From a margin perspective, again, Q1 was certainly a bit lower than we expected. Certainly, we had some expectation with the AGV business in warehouse automation being down. But that volume decline did have an impact on margins. But with the improved volume significantly in Q2 and Q3 and Q4, we should see sequential improvement going forward from Q1 all the way through the year. So I would expect to continue to see significant progress in Q2 and then sequential progress from there 3 and 4.

So to be clear, do you expect to be up margin-wise here? I understand the sequential comment. At what point in time do we get margins up year-over-year?

Yes, margins will be up year-over-year in Prepared Food and Beverage. That is our forecast for that segment, yes.

There are no further questions at this time. I will now hand the call over to Mr. Brian Deck for closing remarks.

Thank you all for joining us this morning. As always, [indiscernible] team will be available if you have any additional questions.

This concludes today's call. You may now disconnect.

Good morning, everyone, and welcome to JBT Marel's 2026 Investor Day. I'm Marlee Spangler, Senior Director of Investor Relations. I've been in this role for about a year, and prior to that was part of the legacy JBT IR organization. We greatly appreciate those of you in the room with us today. Great to see so many familiar faces as well as those of you watching us via webcast. The team and I are really excited for you to hear about our growth strategy and how that drives value creation for the years to come.

Before we get started, of course, a few important reminders. The slides that are being shown here today have been filed with the SEC and are posted to our IR website.

Second is that today's presentation will contain forward-looking statements, which are subject to the safe harbor language shown on this slide. These statements are subject to risk factors, which could cause our results to differ materially from what is presented today. We encourage you to review our risk factors in our most recent 10-K filing. We will also make references to certain non-GAAP financial measures, and we encourage you to review the reconciliations in the appendix of this presentation.

We have a comprehensive agenda featuring great leaders from across our organization. We split the day into 2 halves. So in the morning, first half, you'll hear about who JBT Marel is and our value proposition. We'll take a short break. And after the break, you'll hear about how we're enhancing that value proposition and how that drives value.

We'll end the day with our Q&A session. I'll come back prior to that to give some instructions. But for those of you on the webcast, you will see a button that should be live now to submit questions that we will sprinkle through in the Q&A session. And for those of you in the room, we'll just ask you to raise your hand as we'll have some mic runners.

We'll end the day for those of you in the room with a luncheon where we were this morning in the general reception area and some networking with the great leadership team that's joining me today.

And with that, I'd like to turn the presentation over to our CEO, Brian Deck. Thank you.

Thanks, Marlee, and good morning, everyone. I'm really excited to be here today, and we are all, the management team is excited to be here today to talk to you and share our story about how we are creating the global food technology leader. And we're doing it by bringing JBT and Marel together in a way that we are better together than we were apart. And in doing so, we are living our purpose, which is to transform the future of food.

But first, I'm going to share a video to give you a little introduction to who JBT Marel is.

[Presentation]

Great. So that's a visual. And for those in the room here today, -- further to that point, we do have a virtual hub that I really ask you to take a look at. It gives you an inside view of how some of our equipment works. It's more of an immersive view. So I think you'll enjoy that if you can stop by during the lunch period.

Okay. So what are the key messages for today? First and foremost, as I said, we are building the global market leader in food technology with a distinct value proposition. We're harnessing the collective strength of JBT and Marel. We both bring different things to the table, different experiences, different expertise. But together, we're creating a distinctive value proposition that focuses on innovative technology, service and support, software and our deep expertise in the food industry.

And we participate in an amazing end market. The food market is a great place to be, given its resilience, its consistent growth and the continued trends towards protein consumption and value-added foods consumption. And we're a major player in supporting that. We're executing our integration playbook. We did what we said in 2025, and we're continuing on that path. We're very excited about the opportunities that, that integration brings in terms of growth, synergistic sales, cost synergies and overall shareholder and customer value proposition. By delivering on our customers and creating value for them, it creates shareholder value as well.

And how do we do that? We do it by delivering outcomes to our customers. The world is moving away from delivering inputs and really being measured by our outputs and how we make our customers successful. And we do that by food safety, efficient operations, the volume that's necessary to support those facilities, yield improvement, less food loss, more food coming out of the back end. And automation is a huge trend that we continue to see in that uptime and efficient operations and sustainability and waste reduction remains an important part of who we are.

By doing all this, we're enabling our customers to get the most out of their inputs and really deliver outputs for them. And how do we do that? We do it by our business model that we're creating. First and foremost, it starts with the innovative technology that we have. Many of you know we have a very deep and broad technology base. And in particular, by bringing the 2 companies together, it offers a fuller line of more integrated solution than either one of us could have had on our own. And that's very important as we support our customers in efficient operations. But it's not just about the equipment. It's about everything around it, the service and support, parts, refurbishments, all the things that keep our customers running on a day-to-day basis is critically important. And that's supported by our food expertise, our food science, our process knowledge as well as the software and digital support and data that goes around it because we're moving into a world where providing more information helps our customers make those on-the-fly moves in order to support those efficient operations. And with this holistic business model, it's helping our customers deal with one partner and getting the most out of those operations and building the trust and the relationship and the partnership with a single point, taking the burden off of them that they don't have to do it themselves.

The life cycle support is critically important, as I just mentioned. Service excellence is the key. The vast majority of our interface with our customers is on the service side, delivering parts and service and supporting them in their day-to-day operations, making sure those facilities and factories are running at peak activity. We have a global service network of 1,600 technicians. They're both local, regional, and we have global expertise. And our business model allows our access to our customers through all those expertise throughout the world. So we can make sure we harness that power through our relationships. And again, the world continues to move down a digital and data path to support that entire business model.

Okay. Taking a step back, who is JBT Marel? First, let's start in the middle of the chart. If you look at our end market exposure, and this is 2025 orders based on the markets that we sell into. You can see we are very heavy in the last year on the protein side. Poultry had a tremendous year. It's our largest end market and happens to be our strongest end market as we stand here today. We're also very diversified as you go into meat, seafood, ready meals, pet food, we're a leader in that, beverages, juices. We do participate somewhat in pharma, and we have a great automated guided vehicle business.

So it's really important to understand that diversification. And the thing that always surprises me or pleases me when you look at these numbers year-to-year, there's a fair amount of changes. And the reason is because the consumer and our customers move their investments around to support those end markets. So that diversification is critically important so that we can participate wherever our customers go and wherever the consumer goes.

On the right, if you start on the bottom right, you can see our 2 segments. Arni will give a lot more detail on this, but there are 2 segments, our Protein Solutions and our Prepared Food and Beverage Solutions. Think about Protein Solutions, which are more bespoke to the upfront processing and the Prepared Food and Beverage is taking that median, doing more with it, more value-added as well as our diversified fruits, vegetables, beverages market. Together, that's the way we approach the market.

And what's important to understand in the middle there, for example, in poultry, poultry actually crosses both segments. You have the Protein Solutions, but we also serve that market through the Prepared Food and Beverage solutions by virtue of things like value-added chicken nuggets or whatever, we have ready meals, et cetera. So it does cross both all these categories, many of these categories across both segments.

Critically important is understanding our business model and by virtue of our amazing installed base, which you'll hear about from Augusto today is our split between our equipment revenue and our recurring revenue. Our recurring revenue is a huge benefit to our overall business model, support that relationship, as I mentioned, so much of our participation in the market is on a day-to-day basis. And that's parts, that's service, that's refurbishments, that's consumables and that's some lease revenue, very diversified model even within that.

But as you look at this slide, the key takeaways is 2. One, the diversification that allows us to participate where the consumer moves from an end market perspective. And two, that revenue -- recurring revenue model.

We're also diversified from a global geographic perspective. You can see we have 40% in the U.S., Canada, EMEA and 10% each in APAC and Latin America. That allows us a tremendous amount of flexibility as we develop our supply chains, particularly in a world of tariffs where we can have that operational flexibility to move our supply chain to support the current economic environment.

It also allows us to take advantage of low-cost country operations. So we have low-cost factories in Eastern Europe, in South America and in India as well as China. This allows us to do some best cross country for either component manufacturing for either serving those local markets, which often have a different price point, but also providing a low-cost operations for importing equipment into the U.S. and in Europe. And that's even inclusive of tariff costs. These tend to be more lucrative and low cost even considering that.

Now one important question that you might have looking at 40% EMEA, less than 5% of JBT Marel's revenue in 2025 came from the Middle East. We would expect that to be similar in 2026. I'm sure we'll talk about that a little bit.

Another thing really important to understand about our resiliency is where we sit in the food chain. We are upstream of the customer, the consumer's decision, whether they're eating at home, right, going into the grocery store, quick service restaurants, full-service restaurants, institutionals like educational or hospitals. We work with our customers who make the decisions as to where that food will flow. But we are largely, if not completely agnostic to those end consumer trends. So that flexibility and that participation upstream, along with that diversification globally and the diversification from an end market perspective really provides some support in terms of managing through trends within the economy.

To that point, we've done a lot of work to understand that. This chart shows food company CapEx versus general industrial CapEx for the last 20 years or so. The food line, the green line is approximately -- is 50 companies that we have created our own index looks at the CapEx over these last 20 years. And the black line is the XLI CapEx trends. And the takeaway here is 2 things. One, the growth is higher on average and the volatility is 2x less as measured by standard deviation. So what you're getting, and that's because of all the things I just talked about, geographic flexibility. And the fact is, and you'll hear about this quite a bit today in terms of some of the trends, the trends towards protein consumption and most importantly, value-added consumption, convenience foods as the world becomes more affluent, they want to have more flexibility in their diets and in time to prepare their foods.

On the integration, we've made meaningful progress. In 2025, we executed on the organizational design. You'll hear from Shelley about some of the cultural aspects that we did to be able to be successful and move quickly in terms of absorbing the -- bringing the companies together and having a common purpose and values. We reduced duplicative costs. We started on our supply chain efforts, and we delivered on our promises for 2025 in terms of cost synergies, growth and deleveraging our balance sheet. And we're going to continue on that path of delivering our promises in 2026 and beyond with the focus shifting more towards the supply chain, looking at consolidating our vendor base, doing value-add, value engineer projects to simplify and bring cost out of our products as well as getting the most out of our operations, optimizing our footprint and make sure we are doing the right things in the right places. And I mentioned -- as I mentioned earlier, about utilizing some of our low-cost operations in a way that many others can't. That global footprint, that optionality that we have on that footprint is quite important. So integration is on track in all regards, and we're very excited about continuing that path.

I do want to take a step back and talk about sustainability. This is very important for our customers. and supporting them on their journey in the view of consumers who like to partner with companies that they feel are sustainably conscious as well as the regulatory environment that our customers have to deal with. And how do we do that? We improve and get the most out of the water usage, electricity usage, natural gas usage, minimizing those resource usage. We also reduced food loss, improve food yield, add shelf life and extend and -- sorry, lower usage of plastics as well.

We also support them in the development of new foods by virtue of accessing our customer innovation centers globally, which we have more than 10. This allows our customers to test new foods, whether or not it's on traditionals, but also things like plant-based foods or even things like cellular type foods that we continue to see. So we support them in those journeys. And very importantly, we also support them on food safety and traceability. It's a consistent challenge for our customers to make sure that they serve the consumer world in a safe manner because from a brand perspective, nothing can hurt a food brand more than a food challenge -- a safety incident.

So we support them on that journey. A big part of our role is to support our customers in that brand protection. And as wonderful as these things are from a consumer perspective, from a regulatory perspective, it also supports our customers in lowering their costs. All these things support them on their competitive position in the marketplace. So it's not just for the sake of doing it, it's the sake of actually being -- making our customers more profitable.

Operational excellence is core to who we are. Historically, so JBT has been on this journey for many years, and it's something that we bring to the Marel organization and operations. So we are deploying relentless continuous improvement that lean, we call it RCI, relentless continuous improvement. And really, it's about daily management and driving a culture of taking out complexity and bringing simplicity to the organization. And we do that by daily management, but also by virtue of the JBT Marel business system, which is a disciplined operating cadence, which connects our operating activities, our business to our business performance and our strategic initiatives with a constant feedback loop. So we're always identifying problems and solving those problems in a real-time basis.

So this is core to who we are. And very importantly, takeaway is when we think about continuous improvement, it's enterprise-wide, which means it's not just about cost. It's about competitiveness. It's about reducing lead time. It's about reducing manufacturing time. It's about improving your service network, your commercial interface, your R&D effectiveness. All those things are what helps JBT Marel become more competitive by adopting lean in the JBT Marel business system.

Okay. You're going to hear Arni go deep into this today, but I'll give you a quick introduction to our next-gen strategy. why do we call it next-gen? Because we feel that the industry is moving away, as I mentioned earlier, delivering inputs to delivering outputs in a more holistic business model, not just delivering equipment, but delivering all the things around that, that service, the support, software, that business, that intelligence that we have, that food expertise, that process knowledge that we bring more holistic. And you need all the pieces to do that. You need the full line solutions and you need all those pieces around it. And we feel that the industry is moving to that, not just from our perspective, but if you think about as baby boomers retire and the folks filling those roles, they're more comfortable with the service model. They're more comfortable with data supporting their business. So we feel that is critical to who we will be going forward.

And in order to harness that, we have to have a customer service -- a customer-first service organization. And generally, having access to our -- providing our customers access to the whole of JBT Marel so that we can support them on this integrated value proposition that I've talked about a few times, allowing them to understand the benefits of doing it and taking that burden away from them.

But also, it's also about capturing our full market value of who we are. JBT Marel has a tremendous amount of breadth on our technologies and our end markets, but now all of our customers know and understand that. So having that customer first organization that shows them where we can support them in various places because we have many very global food companies that participate in many end markets. And they don't always know and understand the depth and breadth of our offering. So a huge part of our cross-selling opportunities is our synergistic revenues model will bring that to life.

I already talked about the operational distinctiveness. It has to be core to who we are in terms of continued development of our competitiveness and our cost structure and our margin development.

And lastly, as we get through the integration and we deleverage our balance sheet, we are -- we will look to deploy capital. And we want to deploy capital in a way that supports that integrated value proposition. Not every end market that we participate, do we have the full line solution, do we have that holistic circle. So we will continue to invest there and potentially fill in some other white spaces that we see. But first, very foremost, we will execute on the integration and meet the commitments that we have talked about.

Okay. I'm very excited that you get to meet the leadership team today. These are some of the best folks in the industry. I'm very proud of the work that they've done, the way we've come together. It's a mix of JBT and Marel folks, and this really is the best team in the business. So very proud of the work, and you'll hear from many of them today.

So why invest in JBT Marel? We are executing on the transformation on the integration. The thesis have played out the way we thought in terms of recovery of some of the food markets, in terms of ability to bring these customers, our technologies together to create these integrated solutions and the margin potential of bringing them together. We have compelling market exposure, great end markets in food that are more stable, more resilient than many other end markets. We have a differentiated value proposition, virtue of that integrated model, the holistic model that I talked about. And our terrific resilient recurring revenue model supports us through ups and downs regardless of the economic environment. And we're bringing operational excellence to continue our path on margins even beyond 2028. All that would bring tremendous shareholder value. It brings tremendous customer value, but very importantly, shareholder value.

So with that, I'm going to introduce and have Arni speak to our strategy and some other things. Arni Sigurdsson is the President of JBT Marel. Thank you.

Good morning, everybody. It's really great to be here today. I'm Arni Sigurdsson, President of JBT Marel. I've had various different roles across the Marel organization over the past decade and then led the Marel organization through the merger with JBT. What excites me the most about JBT Marel is the breadth of our offering and the reach that we have. We touch a meaningful portion of every food that is being consumed around the world every day. And that gives us a great opportunity to have real impact and transform the future of food.

What I want to show you is how well we are positioned to drive profitable growth. We are focused on attractive markets with secular growth trends, driven by rising consumption and automation needs. We have this great diversified end market exposure, which gives resilience to our business. But not only that, we've picked the most attractive markets. We're accelerating growth and strengthening our competitive advantage with fuller lines, integrated value proposition around our equipment, service, software and application expertise. We're also leveraging the food expertise and the process know-how.

We then have a large and growing installed base, which is instrumental to our service business and the recurring revenue, which is really focused on having deep partnership and relationships with our customers.

So I want to start to put this opportunity into context by looking at the market opportunity. We are focused on a market of USD 50 billion that is expected to grow 3% to 4% over the next 3 years. We, on the other hand, are planning to grow 5% to 7% above the market. And the reason why we're confident that we're able to do that is because of our unmatched value proposition of fuller line solutions, the integrated offering and the focus of the interaction between equipment, service, software and the application expertise. And then what we're doing is we're continuously focused on innovation. We're continuously innovating to make sure we have the leading technologies that our customers want and require.

We've also oriented our organization to an account-based go-to-market strategy. And the essence of that is to look at our customers through their eyes. So what is the need for that plant, what is the need for that customer, and orient our commercial organization in that way. And then that organization can bring the breadth and the scale and the reach of JBT Marel, the expertise to really help our customers on their journey.

Then we have a customer-centric service model. We're making meaningful investments and decisions to really strengthen that part of our business, and we'll talk about it repeatedly over the course of the day to give you more insights here.

Then our customers are consolidating. What that means is the more sophisticated processors are gaining share and there's consolidation happening and the players that have less efficiency, more manual operations are disappearing from the arena. And why this is important is that our value proposition and our offering and what we focus on is the high-end segment of the market where there's more automation, more sophistication type processing. So this bodes well for our business.

To talk about the market, I want to start to tell you about kind of what's happening on the consumer side because that's driving some of the preferences there. That's driving the volume. And one of the good drivers here that we have often talked about in the past is that the population continues to grow. That means more mouths to feed, which is really good for us. But the world is also kind of developing. And that means kind of people have rising income. There is development there. And that helps with the diet that people have. The more disposable income you have, the more you move from a grain-heavy diet to a more protein-heavy diet. And that obviously bodes well to the end markets that we focus on. Not only that, with rising income, people tend to have more pets, which is very good for our pet business that Brian mentioned that we have a very good position in.

But if you look at the protein market, which is kind of -- you can see it here on the graph that over the past 15 years, the protein market has been very resilient. It's growing consistently. The protein market has grown every year apart from 1 year, which was due to the African swine fever. But not only that, if you look at poultry, it's growing above the overall market. And the reason for that is due to some of the health benefits of poultry. It's due to the affordability. Poultry is much cheaper than some of the alternative food out there, and it's very heavy on the protein side. So it has this very favorable dynamics from that perspective.

Not only that, it takes flavors easily. It's convenient to cook, whether it's grilled, tikka masala, I could go on and you know that. So that's an important trend on the poultry side that is really helping to drive the consumption there.

There are other trends that are really relevant in this context. We all have very busy lifestyles. So the consumer preferences are evolving. Consumers want more convenience, more functional food. So think ready-to-eat, ready-to-heat, ready-to-cook with short preparation time in the kitchen. And what that means, there's a lot more product variety in the market. If you think about -- if you go to the supermarket today, there are aisles of different products that you can buy. If you look at it 10, 15 years ago, it was maybe a shelf. So that has really changed the market, which really means there's more products going into cut up, debone and prepared foods. So the value chain of our customers is extending. And this bodes really well for us because we have a strong offering in exactly those markets, cut up, debone and prepared foods.

This is kind of the essence as we see it from a consumer standpoint. But we also need to look at what's happening with our customers, the food processors because our market is growing faster than consumption of food. And that's because of some of the trends that are happening with our customers. There is rising input costs and margin pressure that our customers are experiencing. So they're very focused on performance optimization, not only for individual machines, but across the whole process. So this is driving an accelerated demand for integrated line solutions from fewer strategic suppliers. Our customers really want to think about the end-to-end process. And the reason for that because it gives more opportunities to improve yields, to improve throughput and just overall optimization.

Uptime and life cycle performance is another important trend that is happening. And the reason for that is equipment is becoming more sophisticated, and there is scarcity of skilled labor out there. So our customers are relying more on us to help them with service and managing their operations.

The last one is the industry consolidation that I already talked about, but it's an important one to keep in mind what's happening in the space. So as you can see, we have really attractive end markets that are resilient and have these secular trends that will drive growth over the long term. So it's not enough to just focus on attractive markets. You need to have a clear right to win, which we do. And the reason for that is because we're exactly focusing on the trends that are in the market. We have a unique position when we look at the breadth of our offering. We have fuller lines. We're very focused on having the integrated offering around equipment, software, service and using our knowledge and expertise because that helps with uptime. That helps with performance when you really bring that together. And then we are innovating to be -- to have the leading technology really where it matters, especially those anchor points across the line in our end markets.

Software and digital are also important tools that we're investing in, and that's really to enhance what we're already doing, whether it's to help on the service front with prescriptive maintenance and uptime or with the line, managing the line, having traceability. So we're using those tools and those capabilities and solutions to really help us. So we do have this unique position in the market, which is the essence of our competitive advantage, which will help us to grow above the market.

Now I'm going to dive into the segments because that really explains better how we look at the different parts of the market and how we service our customers.

So first, looking at Protein Solutions. This segment is focused on the first stage of processing, where we're harvesting kind of the animal protein, but this also includes cut up, debone and fresh processing. We're primarily focused here across the end markets of poultry, meat and fish. And if you look at those end markets, we have a clear leadership position in poultry and a top 2 position in meat and fish, which merely depends on kind of where you look in the value chain.

We have a very comprehensive offering here, so we can offer key individual equipment to our customers. We also have the ability to offer extensive lines in each of those end markets. And we've been building this business over a long period, which means that we have a large installed base, which is evidenced by the high recurring revenue here and the high quality of earnings. Roger will give you some really good insights what we're doing on the poultry side to really bring this to life here.

The other segment, Prepared Food and Beverage Solutions. This is focused primarily downstream on value-added processing. And here, this segment and the technology here is more end market agnostic. So you can just see there's a lot more end markets here that we are participating in. But how we think about this segment is really that we have some amazing leading technologies here. We have kind of our freezing business, preservation, juice extraction, extrusion, kind of I could go on and mention a few more. But that's really kind of where we have great technologies, and then we're building around those technologies to have a more comprehensive offering for the priority markets, which we think are the most attractive. And we've taken great steps here. If you just look at fruit and veggies, we have a great offering, pet food through the merger, really strong position there.

And then Prepared Foods. This Prepared Foods part of our business, that's the part that was significantly strengthened through the merger of JBT and Marel. We now have great solutions that no one else can do. I mean we have hamburger lines, we have chicken nugget lines and kind of Bob will just give you some great insights on the opportunity here. I think we can still do a lot even though we have already reached this great point already.

So that's the segment. We are executing on our clear strategic pillars to drive value creation through organic growth and margin enhancement, and Brian kind of touched on those, and I'm going to give you a little bit more insights to each one of them.

A customer-first service organization drive sales and grow the installed base, which really enables recurring revenue growth. Equipment is the first step in the process to build an installed base. So we go to the customer, we understand the needs, we sell equipment, we install it, we train our customer to operate it, but then we support our customer with maintaining the equipment, ensuring uptime. We have multiple customer visits. We sell service and spare parts. So this is kind of how it works. And if you do a really good job on the service front, you're deepening the customer relationship, you understand the customer needs going forward, and then you're able to sell the next piece of equipment.

So we often say that sales sells the first piece, but service sells the second. And this is really to show this infinity loop that we have here, it's really to show how one reinforces the other and the interplay how valuable that is. And this is really highlighting the importance of service and why we're putting so much emphasis on service from a strategic standpoint.

We're then investing on the service front, like I mentioned, in digital tools and skills, capabilities, to really strengthen that further. And Augusto will give you some great insights to really kind of give you a more deeper understanding on the specific actions that we're taking.

The integrated value proposition is very fundamental and close to our heart. So here is a key focus on making sure we're innovating in the right places. So we have leading technologies that are addressing our customer needs and are the key points when it comes to an integrated line. We're also broadening the offering through innovation, so it kind of -- it starts to enrich the full-line solutions. But here, due to the merger of JBT and Marel, we have an amazing portfolio already. So what we're already doing is in the areas where we already have the building blocks and the right pieces of equipment for align, we're taking steps to make that more seamlessly operate together.

And there, you can think about like sometimes you need to ensure kind of mechanical designs like the height of the equipment is the same or the throughput and the speed operates. And then eventually, you obviously want to have the right technology and connections. So the kind of -- so basically, each piece of equipment can communicate so you start to operate it as one seamless integrated system. And here, there's a lot of opportunities, and you'll hear and see that throughout the day as well. Then, like I said, commercializing the software and digital capabilities really to strengthen that offering even further. That's for you, that's the glue and that's how you tie things together. So that's an important piece as we look at the fuller lines and the integrated value proposition.

We're then focusing on capturing the full market potential. And the essence here is the go-to-market strategy that we have. Like I said, it's an account-based go-to-market strategy. So we are visiting the customer. We're understanding the full needs of that customer. And then we are supporting that commercial organization with product specialists for specific products, product knowledge when needed. We're bringing the service organization and the whole breadth of what we do.

It's not enough to just change the organization. We're also making sure our people have the right tools and the knowledge with product training. We're also making sure that they are incentivized in the right way because here is the opportunity to kind of cross-sell our full portfolio. And we achieved order synergies of $30 million in 2025 with over half of that in the fourth quarter. So it was like very good momentum that we built over the course of the year.

We're also really excited about the scale that we have right now as a combined organization. This is really important when we look at the emerging markets of Asia Pacific and Latin America. Just having people and resources and assets on the ground, just don't underestimate the importance of being able to speak the same language, understand the culture, being in the same time zone from a response standpoint. And now with our scale, we're having distribution center in the region. We're having manufacturing sites in the region, like you saw kind of on the slide from Brian. So this is really important to help us drive more growth in Asia Pacific and Latin America.

And then the operational distinctiveness. Brian covered this extremely well. We're focusing on relentless continuous improvement enterprise-wide. That means we're deploying lean tools. We're implementing daily management. And we're not only doing it on the shop floor. We're doing it across key processes across the organization. And this is not just kind of some tools and so on. We really are focused embedding this into our culture and that this becomes the way we operate on a daily basis.

We also see an opportunity on the procurement and supply chain excellence. We made great progress in 2025 through the integration, but we see further opportunities to consolidate our supply base and with that and deepen our relationship with our strategic suppliers. We see opportunities still to review and look at make versus buy decisions. And then we're looking also at our footprint to make sure it's fit for purpose.

The world has been dynamic to say the least over the year, last 1.5 years. And we have a great footprint around the world in every region. So we want to make sure we have the right proximity to customers. We want to make sure that we can navigate the tariff environment. And we want to make sure we can deliver to our customers at the right cost at the right time with the right quality.

So bringing it all together, and I hope you're seeing why I'm so excited about JBT Marel and the opportunity that we have in front of us. We have these amazing markets. They're attractive, they're growing, and they have these secular trends. We have a clear right to win and a strong competitive advantage with our full aligned solutions, our focus on an integrated offering across equipment, software, service and the application know-how, and we're continuously focused on innovating in the right places.

Then we have this amazing installed base, which is the foundation of our service model that I talked about kind of how important it is. So this is why we believe with our strategic pillars, with the focus on execution, why we can grow above the market at 5% to 7%.

With that, let me turn it over to our EVP and President of Poultry, Roger Claessens that will give us more insights into our poultry business. Thank you.

Good morning, everyone. Thank you for being here, and thank you for giving me the opportunity to share my enthusiasm about protein processing and then especially about poultry processing. I'm Roger Claessens, I'm leading the Poultry Division within JBT Marel, and I've been within the company for 25 years. I started 25 years ago as a field service engineer. And ever since, I've been fascinated about its challenges within the poultry processing industry.

So let me take you a little bit along in what's going on here. Arni and Brian have explained, let's say, the challenges that our customers are up with every day. There's a full push for more volume because we are eating more and more chicken and beef and protein going further. There is a different push on more SKUs, more end products, so that also plays into our environment. We are more and more aware of what kind of food we want to eat, so track and traceability. Food safety is also high on the list of our customers in order to have solutions for. That, combined with a scarcity of skilled labor is an ideal mix of case studies that I would like to present to you.

So we prepared 3 case studies. One is related to our full-line supplier ships. So I'm going to explain a little bit about that. The second is about creating a win-win situation with automation and, let's say, making sure that we are able to also create a full-line supplier ship in the end solutions of slicing and dicing because we're changing our diet. And the third one is how we partner with our customers in order to overcome geographical regional bottlenecks. So let me take you through all those 3, and then I hope you get as excited about protein processing as well.

The first one is related to Bell & Evans, a poultry processor out of Fredericksburg, Pennsylvania, family-owned, third-generation and full focus on quality. It's not only about quality of their end products, but it's quality full end, it's quality at the farm, quality at the hatchery, quality for the people that work for them. It's all in their brand. And if you potentially go to Wegmans here in the U.S., then you can find their products and they clearly are seen as a premium brand.

That family has approached us over the years and saying, hey, can you help us design the poultry processing plant of the future. We are in the need of expanding our capability because the demand is there, and we want to embrace everything that leads needed for the future because we need the next steps in order to be ready for that.

So we partner with them, and we've shown all our modular building blocks because the modular building blocks lead into customized solutions, and we have been able to adapt our solutions to fulfill a full-line. And the full-line starts from post farm up to dispatch, as Arni also has explained before. You could see that line consists about more than 800 building blocks that we, as JBT Marel, have and that we are able to offer and with that, making a customer line with modular building blocks going forward.

Let me take you through a few of the items that are very important for the quality aspect. When we start at the post farm environment, all our smart stacks have an RFID chip. With that, we start to track and trace temperature on the truck. We know how long a bird has been traveling, and that is already good input into the first step of the process. When those birds are at that moment being stunned and therefore transformed into bird into a carcass, we already start to measure, let's say, with weighing the birds on 5 different spots on 5-gram accuracy. We make across the process more than 50 pictures on the front and the back side to assess the quality. And when we are in cut-up and deboning, we have X-ray technology and other quality cameras and sensors in order to optimize.

This is not only feeding the optimization of these customers in order to get more value and to assess the quality and track and tracing, but it also gives good information back into the agricultural side to optimize their breeding program and their chickens in order to make the next steps because that's what we're heading towards. It also is able to connect them with the track and traceability of the supermarkets. In this case, Wegmans and all the other suppliers in order to have a full transparency going forward.

I would like to invite you also to visit the virtual hub that we have in the room over there, where we have explained -- where we are able to explain this full-line supplier ship going forward. So remember, 800 building blocks in a full-line, all the various sensors being combined in our software packages, of which Arni is going to talk about a little bit later. And that combined with the uptime that is super high.

That relates into -- and I would invite you also to go on YouTube, type in Bell & Evans, and you will find Mr. Sechler, who will give 15 minutes introduction into his poultry processing plant, fully transparent. And I would say, it's the largest advertisement that we've ever gotten without asking for it. So I'm super excited about this.

Let me take you through the second use case. And here, we are combining the need for automation because in this case, it's even more hard to find skilled labor, combined with the change on consumer behavior, 15 years ago or maybe 20 years ago, all of us would buy a whole chicken. We compare that at home. Today, I have 2 girls, 9 and 11, my 11-year old can make a meal because when we have HelloFresh, all, everything on the protein is already sliced, diced, potentially marinated and she just needs to put it into the fine bin and cook it. These solutions are all happening in the environment of our customers, and we have those solutions to help them. And therefore, to debone chicken breast, we've been doing that for over 50, 60 years. However, to make the next step in fully automating that and making those processing steps already ready for the next step, like the full-line supplier ship that Arni also referred to, that's the mix that we are looking into.

So what we've developed in this case with Plukon is a fully automated breast cap debone. It's running 6,000 birds, 3,000 breast caps per hour. And in that, there are so many sensors that every cut, every preprocessing step is automated to achieve the highest yield and therefore, fully automated and therefore, even better than manual deboning lines.

If you would look at the world on deboning, you could say that still 50% of everything that's being deboned is done manually. Specifically here in the U.S., it's even about 40% where it's done manually, where in other parts of the world, deboning of breast is done more automated. This is the next generation, and what is so exciting about this generation, fully automated all the data in there, and what I'm even more excited about is that we are able to connect it to the cut up line and the process afterwards because this machine will make sure that every fillet is correctly positioned on a conveyor belt so we can inspect it further on. And what advantage does that have is that when you have a controlling or inspecting process step, cameras or other technologies can take over. And therefore, we eliminate, let's say, the judgment or the subjective judgment of people on the line. This is a crucial step into our full-line supplier shape moving forward.

Let me take you through the third one, and this is more a geographical one. When I was speaking about Bell & Evans, I didn't mention that at this day, we are at average processing speed of a chicken processing line, it's between 200 and 250 birds per minute, that's more than 4 birds a second. Imagine with the 800 building block that I spoke about in the first case, how many items are moving about there. However, here in the U.S., the line speed has been restricted to 140 birds per minute, not because there's no technology, because of regulation in order that we are able to inspect the birds on the line and to ensure food safety.

If you look with the increasing rise of output, increasing demand on poultry, that means for our customers here in the U.S. that they almost need to buy 2 lines to do the same output compared to, let's say, a competitor of them outside the U.S. And if you would see that every second line besides the investment, which would be good for us as JBT Marel also needs double the amount of people in order to fill them. If you would be able to move to 250, that will be a great thing to do.

So what did we do? We partner up with customers. We found the connection with the USDA and we found a solution in which we are able to process 250 birds per minute. How are we doing this? That it's just like a highway just before the inspections. We split the lanes, we slow down. Actually, we slow down to 125 birds per minute. They can be inspected and then we merge the lines back in again. It's a little bit technical, but that enables our customers to make the next step into, let's say, fully automation and being more competitive. That's a huge step, and that will, let's say, change the industry here in the U.S. for the coming decades because those changes are not done overnight. This combined with the 800 building blocks with the speed of 250 birds per minute. Going forward, we are well positioned in this case, in order to make the next step in being the full-line supplier that we would like to be in embracing also the service environment.

With that, I hope you also got enthusiastic about poultry processing as I am. I could do 5 more cases, but we also have nice cases on beverage and meat. And with that, I would like to introduce EVP of Meat and Prepared Foods, Bob Petrie. Thank you.

Thank you, Roger. Good morning, everyone. My name is Bob Petrie, and I'm the leader of our Meat and Prepared Foods business. I've been with the company for just over 17 years, joining when JBT acquired Double D Food Engineering, a company in Scotland that I was a former owner. Prior to this role, I led JBT's protein and Asia business for just over 3 years. And I've been in this role for just over a year since January '25.

I can't tell you how excited I am to be part of this amazing journey with JBT Marel. We've put together an incredible combination of technologies that is truly unparalleled in the industry, and that makes us unique, and it's an honor to be here today to help explain that to you in more detail. What I'd like to do over the next few slides is share with you how we bring together the breadth of our technology and deep processing know-how to solve some of our customers' most complex needs. The lack of labor and proliferation of SKUs in many of our prepared foods and beverage end markets is leading our customers towards more full-line solutions that deliver flexibility, ease of use, all while reducing energy consumption and total cost of ownership.

We are further advancing our full-line solutions by integrating the latest in AI and vision technology to inspect and remove nonconforming product, a task that until recently could only be performed by manual labor. Our solutions here are faster and more reliable, meaning our customers can produce more throughput, and they can produce better quality products.

And we are developing these full-line solutions by using standard modules or technology building blocks to create them. That allows us to reduce our cost and reduce the complexity in both our supply chain and our installed base. This means that we can service our equipment better and service our customers better.

In the next few slides, I'm going to walk you through some real examples of our solutions. First, we'll take a look at one of our flagship end-to-end processing lines. Here, we have a full-line solution for producing fresh and frozen hamburgers for a well-known U.S.-based quick service restaurant or QSR as we often refer to them. Our customer in this case, Danish Crown, approached us with some very demanding requirements for the line. The line had to produce 100 tonnes of hamburger per day. That's enough hamburgers to supply around 1,000 QSR locations Each burger had to be exactly the same with no deviations and comply with very specific specifications for weight, shape, thickness, fat to lean content ratio and, of course, no bonds.

Our solution here was to offer a fully integrated complete line, starting from meat inspection to meat preparation, which is grinding and mixing, to forming, freezing and [ win. ] We were the only company that could offer a full-line solution that could deliver on all of these requirements. So this is a great example of how the combination of JBT and Marel had allowed us to offer a solution that neither company could have offered on their own, nor any other company in the industry for that matter.

Prior to the combination of the 2 businesses, the burden and risk of bringing together separate pieces of technology from many manufacturers that would have fallen on Danish Crown. And that was one of the key differentiations in this project. The advantage to Danish Crown having this full-line solution is that they now have a single accountable partner, not just for the delivery, installation and start-up of the line, but also for all of their processing needs and servicing needs going forward. This will allow Danish Crown to improve their efficiency and help them improve their competitiveness. And we are delighted to take care of all of that for them.

Our next solution is in the beverage packaging industry. Here, we have what we call our EV filler, which is a next-generation volumetric beverage filling platform. This is a great example of how we use our deep processing know-how and food science know-how to create breakthrough solutions for the industry. Typical customers in this space would be global producers of water, carbonated soft drinks, juice, tea, et cetera, and the challenges our customers face in this area are twofold.

The first is around flexibility, where a customer wants to change a product or packaging from one type to another, then in a traditional filling line, that would take a lot of change over time, meaning a traditional filler line has very high downtime. The second challenge is in total cost of ownership, and that is driven by the energy intensive nature of the processing.

Our solution here is a next-generation filler designed for use for multiple beverage types at ambient or warm filling temperature. This unique concept eliminates the need for the energy-intensive prefill chilling and post seam warming steps. EV filler also has a unique method for filling the container, which means that we can control the fill level but to a greater accuracy than a traditional filler.

So what benefits would a customer have using an EV filler over a traditional filling line? Well, the total cost of ownership would be down by around $700,000 per year per filler. And keep in mind, many customers in this space would have multiple fillers in their operation. And because we've collapsed the number of processing steps down from 3 to 1, we've been able to reduce the change over time, and so improve that all important uptime for our customer. And of course, we can do all of that in a much smaller footprint. So EV filler is a breakthrough solution for the industry, delivers higher return on investment, and that really helps us develop deeper and stronger relationships with our customer.

In this next slide, I'm going to talk about how we are differentiating our full-line solutions even further through the use of AI and vision technology, in this case, to eliminate labor, increase throughput and improve product quality for formed, coated and fried product. A typical customer in this space would be producing very high volumes of convenience type products. So think of chicken nuggets. And our customers here are delivering to large demanding QSRs with very exact in quality and delivery standards. To comply with these standards, our customers are placing manual labor along the line to inspect and remove nonconforming product. As you can imagine, this is very expensive, but more crucially for our customers, it's also prone to human error.

Our solution here is to place AI-enabled vision cameras system above the production line to inspect each individual product being produced. Our cameras have been taught using machine learning to understand our customer specification and [indiscernible] for action when it detects a nonconforming product. That action could be to remove the nonconforming product using our automatic removal conveyors or it can be to flag to an upstream piece of equipment to signal to stop production and thereby prevent any further defective product from being produced.

The accuracy of our camera system is shown to be at least as good as the manual labor it replaces. And of course, thumbs up every day, doesn't take any breaks. And crucially, for our customers, its decision-making quality remains consistent throughout the duration of the shift, unlike the manual labor it replaces.

Customers who deploy this solution can significantly reduce their labor, increase their throughput and reduce the amount of scrap and rework from the line. Not only are we using this technology to differentiate our full-line solutions for new equipment and CapEx projects, we can, in certain circumstances also offer this technology to existing customers in the form of upgrades. And we're also looking to deploy this application -- deploy this technology to other applications, particularly in the QSR and retail part segments where product appearance is particularly important.

So that concludes the kind of more technology part of the presentation. What I'd like to do now is shift gears and talk a bit more about how we leverage the benefit of our scale through standardization, supplier consolidation and best cost country sourcing. We do this through what we call our VAVE or value add, value engineering program. By the way, this is one of the key levers we have to offset our tariffs. The VAVE program is designed to reduce cost, reduce lead time and reduce the number of product variants we have in the field. This makes it easier for our customers to use our equipment and easier for our service teams to service our equipment.

In this example, we're looking at control panels. The background here is that as both companies have grown in the last few years, they've accumulated many product lines and many engineering teams. These engineering teams are designing their own control panels to suit their own customer requirements and very often using their own technology preferences. So as you can imagine, we have many unique control panels across the company.

These control panels are often engineered to order. Sometimes they are made in-house and sometimes they are made outside the supplier. By bringing these teams together and focusing on a standard design using standard components, we can then reduce the number of variance, reduce the engineering lead time, enabling us to consolidate that spend into one larger supply contract that we can then take to a supplier in the best cost country.

So what impact does the VAVE program have on our business? Well, we have an ongoing program of VAVE projects in many of our businesses. And typically, we would expect to see around 25% to 30% cost reduction. In this specific example with control panels, we saw cost reductions up to 50%, in addition to significant lead time reductions.

And with control panels, the benefits doesn't finish there. Where we have harmonized some control panels, we get feedback from our service teams telling us that the installations go faster and smoother because now they know what to expect when they open the box. And of course, our new product development teams, they can also tap into these common control panels to allow us to scale a solution even further. Getting engineers to agree on a common standard across the world is no easy task, trust me. But I think you'll agree that the efforts we presented are very much worth it.

So now you've seen some real examples of how we've solved some of our customers' most complex needs using highly differentiated and integrated solutions. These highly differentiated and integrated solutions are what enable us to win in the marketplace. This is what I was referring to in my introduction when I said we were unique. So this is a really important point. And before we move to the next part of the presentation, I want to take a few moments to summarize and recap exactly what it is that makes us different.

We bring together equipment, software and services together, working seamlessly to solve some of our customers' most complex needs. We developed new products to solve real-world problems using scalable platforms that can be adapted to multiple end markets. And we are integrating technology building blocks to deliver complete end-to-end solutions, and we do that right across the world. We also have deep application and process and know-how across protein, prepared foods and the beverage industries.

You put all that together, and we really stand out from the crowd. We have differentiated technologies that no other supplier can offer. We offer full-line solutions that no other single supplier can offer. And for these reasons, we truly are uniquely positioned in the industry.

You heard me say in my introduction about just how excited I am to be on this amazing journey with JBT Marel. Now you know why. And with that said, I'd like to now hand over to Augusto Rizzolo, our Executive Vice President and President of Regions and Integration.

Thank you, Bob. Good morning, everybody. So my name is Augusto Rizzolo. I'm the EVP, President for Regions and Integration, as well as responsible for the global parts distribution center at JBT Marel. I have been with JBT Marel over 6 years. And prior to joining JBT, I spent my entire career working in industrial and the manufacturing sector, leading products and service business with full P&L responsibility in a global context.

So the topic that I'm going to be sharing that with you today is why service aftermarket at JBT Marel is one of the most attractive value creation levers for our growth. And most important, why service, it is a such accretive component to our customers in how they run their operations.

So I'd like to start that by delivering you some of the key messages that are going to be covering today, but most important, how those measures are going to anchor the strategy for JBT Marel moving forward. As you're going to see it through my presentation today, at a high level, our strategy is quite simple, right? JBT Marel benefits from a large global installed base, which that itself provides a long-term customer relationships, and not only that, but us having the opportunity to target sell the valuable installed base. It positions us to continue growing the recurring revenue at a very attractive margin.

During the integration with JBT Marel, we had a great opportunity to talk with several customers around the world. And we learned a few critical components that's helping us to transform this new service and aftermarket business model. What we learned is that more than ever, the uptime from our equipment, it is critical, right? It is also very important in the way that we are transacting and doing business with our customers. It is critical how we communicate and show consistency in terms of how we're delivering the service in the different end markets that we play and the different products that we offer.

So to respond to that, as I said, we are in the process to transform our service and business model by focusing on what matters the most to our customers, which is the customer-facing metrics that we are going to be introducing to you today as well. And as we focus on developing a new business model, we are also looking at ways to create new growth and operational initiatives to continue expanding our recurring revenue and expanding our margins profitably.

So to better understand why the service is such a critical component, I would like to give you an example of how and why JBT is well positioned to help our customers during the product life cycle. Okay. As you heard from Brian and Arni today, I'm glad to say that today, more than ever, JBT Marel, it is well positioned to deliver this holistic and customer-centric business model. Why? A couple of reasons.

We have the reach in terms of our global engineer in field service, 1,600 technicians out there that can be available to support our customers. At the same time, we had the product and the process knowledge that makes this urbanization unique in the [indiscernible] end markets and the products that we play. And most important, as you learn from Roger and Bob today, we have the capabilities to provide a full-line of solutions in those core end markets that we play.

And here, I would like to reintroduce this infinite loop, which was shared by Arni previously. I think this is a great representation of the entire customer journey. And here, I'm going to be focused on the right side because it's the right side where our customers rely on the most, right? Once we have sold that equipment, we have commissioning we and our customers rely on us to continue providing the service during the product life cycle.

At the same time, on the right side of that, it is where we, as JBT Marel, we can benefit from the most in terms of attractive value creation, right? As a matter of fact, on the right side, during the entire product life cycle, we can generate close to 2 to 4x the value of the sale of the new equipment, and I'm going to get in some more examples about that.

But before we go to the next slide, I'd like to give some perspective for the customer needs and how we can support our customers. At JBT Marel, the customers rely on us, thanks to our product and our process knowledge. And I can tell you that out there, there is no one else better than JBT Marel that can service that equipment. Our customers, they also rely on us in our ability to provide preventive maintenance as you're going to learn later on, but also our ability to provide a higher uptime.

The third one is parts availability. Our customers rely on us that during this entire product life cycle that we will have the parts available in case they have a downtime. And as you can expect, in order to keep the parts for 10 to 20 years, that require some investments on our side as well.

So I think that gives you some perspective of why customer matter, also why service is such a critical component to our customers, but most important, why is that a value creation opportunity for JBT for the next 2 to 3 years.

Okay. So in order to respond to those customer needs and the same, try to capitalize the opportunity that we see in terms of the aftermarket service, I have to say, I'm glad to say actually that we have been working in a set of our focus and strategic initiatives for the service business model. The new business model that we are developing for service has a focus to deliver best-in-class customer-facing metrics. And our goal has been very simple, it's to deliver a service that can be more consistent, localized and responsive to our customer. And in order to deliver that, as you can see here, we are focused on 2 core initiatives.

The first one at the top is about our people, our culture and our organization in which Shelley is going to be spending some more comments about that during her presentation. But here, during the integration of the JBT Marel, and the development of -- or designing of our new operating model, we made a conscious decision that we would like to integrate the service organization within our global operating units and giving the right levels resource and accountability, so we can do the right thing to the customer at the different regions and markets that we play.

The second one that you see there is about having dedicated service process, tools and operations. So at JBT Marel, we recognize that running a service organization is different than running manufacturing sites. And for that reason, we have been investing in new tools, in new processes and capabilities so we can enhance how we deliver our service to our customers.

So those 2 together is going to deliver this new business model, which is going to be sustainable. But most important, we're going to be able to scale and deploy to the different operating units that we have and the different end markets that we play. And the results, as you can see on the right, is a continuously improving the metrics that our customers care the most, which are the customer-facing metrics. And by improving those customer-facing metrics, we will continue to deliver incremental value to our customers into JBT Marel.

So just a quick view about what are the benefits that we're already seeing, thanks to those improvements that we're doing in our business model for service. Our customers are already perceiving better service levels and experience across the different end markets and products that we sell. They are getting faster response time and resolution times, better parts availability. But at the end of the day, it translates to uptime.

For JBT Marel, thanks to the results that we have been delivering to our customers, it positions us as well to be the partner of choice, which that itself gives us the opportunity to start developing stronger customer relationships, build the trust, which, at the end of the day, give us a higher probability to targeted selling of the installed base and continue increasing our recurring revenue.

So these outcomes are not only able, thanks to the improvements that we are doing in our service model, but also thanks to the investments we have been doing in terms of digital and new technology. Take me to the next slide. So JBT Marel has been investing in a significant amount of dollars and resource in the last couple of years to build what we call this digital platform. And today, I'm really happy to say that digital, it is a core capability within JBT Marel, and Arni going to give you some more perspective about that during his session.

But there is one thing I would like to call out over here, which is what set us apart with everybody else in this market that has a digital offer. And that differentiation that we have is our ability to combine this digital platform, which is proprietary from JBT Marel with our product and process knowledge that is embedded within our organization. This is what makes us unique in terms of this combination of digital and product and process knowledge. And that enable us to leverage the digital, to better service our customers and be more productive in terms of how we're running our service organization.

I'd like to give one perspective -- and to put this in perspective, sorry, I'd like to give one example of how we can apply the digital platform into our service field operation. So thanks to this digital platform that today exists in JBT Marel, we're able to connect with our installed base. And not only that, having that connectivity, combined with our product and process knowledge and years and years of experience of servicing the installed base, we're able to create some algorithms in which can provide us valuable information in terms of what are the key parameters that we should be measuring in that equipment that also provide us the ability to prevent any downtime, and in case we have a downtime, that assessment and symptoms that we have in that equipment, it give us the possibility to dispatch the right technician with the right knowledge to fix that problem.

And also, it give us the visibility of what is the right part that technician should have so we can fix that by the first time we dispatch the technician. So think about how valuable is that, right? Having the ability to fix the machine the first time that we get there, and also give us that insight of how we can be more efficient in running our service operation. So no one else is capable of doing that, thanks to the digital and our product and process knowledge.

All right. So that execution depends on several other factors that I spoke here. It depends on the digital platform that's available. It relies also on our field service engineer, which is by far one of the most valuable asset we have at JBT Marel, and also relies on parts availability, which takes me to the next topic.

Here, I would like to start saying, to deliver best-in-class service, parts availability is key, right? And today, in JBT Marel, service, I have to say, has been sharing with our manufacturing sites, which, in some case, can cause some challenge in terms of how we are treating this business. And why are those challenges? Well, first, we are sharing the same resource in terms of running a service organization and a manufacturing site. So you may have some conflict priorities. In some case, we're also sharing the same process and KPIs, right, which now may be the right process that we need to run a service organization.

The great news is that we recognize and we have been changing the situation by first introducing this business model that I already told you and the focus that we're putting in terms of running the service organization within our operating units. But second, which I would like to introduce here is this new structure that we have now in place with a dedicated parts network for our service business.

As you can see here, that structure that's already in place is simpler and relies in 2 global distribution centers, one in the state of Georgia here in the United States. The second one is in Europe, located in the Netherlands, that, by the way, that distribution center that we have in the Netherlands is considered one of the state-of-the-art in terms of technology and automation that we have in place. The automation that we have in the facility that we're able to pick and play the parts automatically with -- supported with the IT solution that we have. For most of the orders that we received in the facility, we are able to receive the order and ship at the same day, which is a very compelling competitive advantage in the market that we play.

Those 2 global distribution centers itself are being supported by 2 regional distribution centers in emerging markets that we have a significant presence in terms of installed base, but most important, as you heard from Arni, opportunity that we see in terms of growth, in terms of revenue and new equipment growth for the next 2 to 3 years.

The results that we're seeing out of those 2 or combined structure that we have in place, it's a global scale, but also delivering the local speed that we need translated to some of the benefits that we see here. We've already seen 20%, 25% improvement in terms of on-time delivery. We also see improvements in terms of how we're running some of those operations, which is impacting level, lower levels of inventory and reducing our operating costs, thanks to the consolidation and investments that we are doing in automation.

So with that, I would like just to step back for a second. And because I have been talking about several things here, the improvements that we are doing in our service model, I spoke about how digital together with the field service engineer can be a very compelling value proposition in terms of service to our customers. And I gave you also some perspective about the investments that we are doing in our distribution centers to improve parts availability. Now think about if we pull all this together and are able to deliver this in terms of offering to our customer in which they can get the full potential of the service offering that we can do. And here, the great news is that JBT Marel today is capable to deliver that through what we call our ProCare service agreement.

The ProCare service agreement, it is where we can deliver this full service potential to our customers. It is where our customers can leverage the valuable knowledge that we have in terms of the product, the process, that is where they can get access to this digital platform that is proprietary to JBT Marel, this is where they can get the parts of the ability that they need, supported now, thanks to the distribution network that is already in place. And most important is the line of support that they need to prevent any downtime and focus on uptime during the entire life cycle of the machine.

So this is very powerful to our customers, at the same time, a great opportunity for JBT Marel in terms of continuous growing our recurring revenue. And as you can see here on the slide, we can create a significant amount of value by focus on that, it's between the range of 2 to 4x the value of the equipment sales that we can get out of this ProCare program. So think about the significance of that by applying this across the entire installed base, which takes me to the next slide in terms of what are the actions and how we're going to be unlocking after market growth for JBT Marel in the next 2 to 3 years.

I'd like to start first, reinforcing that we benefit from this global installed base, right, for JBT Marel. And here, you can see a number. We estimate that the installed base to be around 200,000 key machines around the world. And today, we capture roughly 40% of the share of wallet. And we do know that best-in-class manufacturing peers, they're not necessarily not only in the food and beverage processing, capturing a range of 50% and 60%. So that itself gives us a visibility of the upside opportunity that we have for the continuous 2 to 3 years. And here, I also like to give you some perspective of how we're going to be achieving the 50% to 60% share of wallet opportunity. And that's focused on some of those 4 drivers that you see here.

The first one is about expanding our service labor or service contracts, so by focus on the ProCare. The other one I'd like to introduce here is the rebuilds and upgrades. We haven't spoken much about this, but we would appreciate that during the entire product -- life of the product, that can be between 10 to 20 years. And due to the market dynamics, customer needs would evolve and change. And here is an opportunity because we have upgrades and kits that we can offer to the installed base to improve in terms of yield, automation, and some other requirements that our customer may have, which is a great opportunity for JBT Marel.

And the last one is the parts share of wallet. Even though today, if you look at our recurring revenue, parts represent a significant share of our revenue. We do see opportunity to continue growing the parts revenue, thanks to the investments that we're doing in our distribution networks, which are going to deliver parts availability. So that's how we're going to get to this 50%, 60% share of wallet in the next 2 to 3 years.

So summarizing my presentation today, I would like one more time to reinforce the benefits that we see from the JBT Marel installed base. Remember, 200,000 key equipments out there, which provide us a great opportunity to continue growing the market above market rate, but also a great opportunity to continue strengthening that relationship with our customers. And that combined with what I presented today of our new service and aftermarket business model with the digital and field service capabilities that already exist inside of our organization and the investments that we are doing in terms of distribution network to improve our parts availability, that together is going to be delivering compelling results for JBT Marel, which Matt's going to be covering later on.

And also, hopefully, I was able to give you some evidence where do we see that aftermarket growth coming from, from those 4 key pillars or drivers that we see, which will position us to improve our share of wallet. And I would like to conclude, this is all possible thanks to, one, the initiatives and for sure, the investments that I have presented today. But most important, this capable -- we are capable of doing this, thanks to the people and the leadership team that we have within JBT Marel today because that's where the knowledge resides and that's really what makes us unique and different in a market that we play globally.

So with that, it concludes my presentation. It concludes the overview of our service and aftermarket. And I would like to turn that back to Marlee. Thank you.

Thanks, Augusto. That concludes the first half of the presentation. So we'll move into a break, quick bio break, ask that everyone be back in the room around 10:47. Thanks, everyone.

[Break]

Welcome back from the break everyone. We're now moving to the second half of the presentation. And with that, I'd like to turn it over to Executive Vice President and Chief Human Resources Officer, Shelley Bridarolli.

Thanks, Marlee. Good morning. How are you all? So I'm Shelley Bridarolli, as Marlee said, I'm responsible for human resources at JBT Marel. And I have a number of years in diversified industrials. That is my background. And I'll tell you, I was really excited when I came to JBT Marel because at the end of the day, the employees are excited about what we do. They're passionate about our purpose. They want to transform the future of food. And as an organization, we can harness that, right? We can take that energy and that passion and activate it to reach our potential. And that shows up in how people operate every day.

So I want to share our people story with you this morning. I want to tell you what it looks like in practice because we've had 4 areas that we've been focusing on. The first is driving that disciplined integration, ensuring stability, clarity and coordinated execution. Second, we're building a high-performance, customer-oriented organization. We want to accelerate this organization, meet our synergies and execute in a fantastic way.

Third, we're attracting, we're developing and we're retaining our employees, right? We want to strengthen that customer responsiveness you've been hearing about this morning. We want to enable speed with a unified operating model.

And last, we're harmonizing our talent systems and our incentives to reinforce accountability within the workplace, collaboration, but also cross-selling an enterprise-first behaviors. Together, this is how we scale what makes us distinctive from everybody else. It's their expertise, their commitment to customers and their willingness to run towards problems. By retaining our talent, by developing them and their capabilities and attracting new talent that fits within our value system, we're unable to execute and support long-term value creation.

So every story begins with the foundation, and our foundation is about values, right? We brought 2 very proud organizations together. They're proud of their history, proud of their culture, proud of who they were. And you all know that 1 of the top 2 reasons integrations fail is because of cultural misalignment. And on the surface, we are at risk of that when you have those proud environments.

Getting shared values right is absolutely the foundation of everything you do, not just culturally, but also operationally. We were presented with this rare opportunity to bring these organizations together. And when you do that, many leadership teams who are inexperienced choose to move fast on everything, thinking that's the right thing to do. Our leadership team has been through other integrations. For me, this is my third of equal size. And I will tell you, you moved slow when it comes to values, you don't move fast, because it is a foundation of everything you do. It's how you operate every day.

Now you don't also slap them on a wall. The culture is about moments. It's not about meetings. So you need to ensure that you're excavating what makes you distinctive. That is key in making it happen. So we spent a lot of time doing focus groups, looking at historical documents, talking to folks, doing surveys in order to emerge the values that we ended up with. And the interesting thing is, although on the surface, we might have looked a little misaligned, we really weren't. In fact, we are extremely aligned.

How we approached it was maybe a little bit different. But at the end of the day, our values were very similar. We all wanted to collaborate, right? We wanted to create true collaboration, and we had the opportunity to bring the best of both styles together in order to do that. We want to serve with integrity, do what we say we're going to do. We are driven to win. We're driven to execute. Grow with excellence. That's about putting that enterprise-wide relentless continuous improvement you've been hearing about and driving it through the organization, right, knowing where and how we need to improve.

And of course, advancing with innovation, right? We had that Marel blue sky innovation with JBT's practical innovation that we look to commercialize. We can bring the best of those 2 together. What's important is these values are not stand-alone. They work in concert. That's really important because together, they create a high-performing culture. And that translates into execution, which creates long-term value.

So a key piece of that value creation is making things simple for our customers, right? We talk about worry-free processing. We want it to be simple. They just want their operations to run smoothly. They want to be unburdened. And by leading with our purpose and values, we can focus on our commitment to retaining employees, developing employees, that's what differentiates us in the market. And it allows us to scale. We always need to invest in our technical experts. That's really important. We need to be ahead of the curve.

What I want you to focus on in this slide are really the 3 middle bullets, right? We know we have technical experts. We know we're delivering relentless continuous improvement in a positive way. But in order to really win and take it to the next level, we need technical experts who are looking at it from the customers' lens. They need to understand that they have to actively listen to what those customers need because then they can work the problem, but not only work the problem, solve the problem, and sometimes even solve the problem with new and existing technology through cross-selling by solving a problem before the customer even knows that they have it.

We need to take our secret sauce, which is our expertise in food science and processing, and we need to make it even stronger. We need to create that customer-centric expert who takes our technology, existing and new, and bring it to the table. Yes, we've talked about our foundation, and we've talked about developing our individuals. But we also want to attract new talent where it makes sense. Our purpose is clear. It is a mission for many people. That attracts people in the marketplace. People also want to work with other experts. They want to work with people who are better than them or at least at the same level.

And so what we've done has gone out into targeted hiring. For example, in the U.S., who builds better technical talent than the U.S. military, right? That's what they're known for. But they don't just create technical experts. They train for risk. They train for resilience. They train for running towards problems with collaboration. That is a perfect alignment with JBT Marel. Those are the folks we're looking to bring, the ones who are ahead of the curve and willing to have a mission and focus on it.

Now by having this fit alignment, we've actually reduced our time to hire by about 25% in some of our customer-facing field service roles. That means that we actually can get to the customer faster because we have the technical expert to understand what we're doing. Retention has also increased. In fact, an interesting fact that we have is we have the lowest voluntary turnover either company has ever had since we've come together. People are focused on the mission, and they're excited about the opportunity.

Now outside of the U.S., obviously, we want regional hubs. We've had digital hubs, customer innovation centers. That is where we're bringing people in through trade and educational institutions so that we can build that pipeline so we're ready for our customers when they need them. This strengthens our capability and has direct customer impact.

So we've talked about how we've built the organization. Let's talk about how we're sustaining that because it's great to build it, but you have to sustain it. And we are doing that through leadership and organizational discipline.

You heard Brian earlier, who was very proud of our leadership team. I'm very proud of our leadership team. But it's not just the leadership team, it's leaders all the way through the organization. We are very selective of who we put in leadership roles. We need to ensure that they have deep domain experience. We need to ensure they have a customer orientation, they're coming at it from the customer's lens and proven P&L execution. And in order to ensure that they are laser-focused on delivering results in a positive way, we've established a clear operating model, clear expectations that are really tightly linked to financial outcomes and operational excellence.

Arni talked about rising costs, margin pressure and performance optimization for our customers. We are not immune to that. We also face those pressures. And because of it, we have driven that relentless continuous improvement enterprise-wide. We tackle our own problems with the same vigor we do our customers. right? We embed that cadence into our daily management. And together, all of this creates a performance-driven organization built on leadership depth, execution discipline, and consistent accountability, all of which serve our customer and create value for us and our shareholders.

Incentives also sustain a high-performing culture, right? They reinforce performance and behavior. And as part of the integration, we spent a lot of time aligning and harmonizing incentive structures across the entire organization. This created consistency and expectations. It also reinforced accountability. So our short-term incentives are tied directly to adjusted EBITDA, margin performance, cash flow where a significant portion of our pay is also on long-term incentives. And our long-term incentives are focused around adjusted EPS, ROIC and relative TSR.

So incentives often feel like a financial conversation, but I would argue at its core, it's actually a values conversation, right? We need to ensure that people are rewarded for the right things and doing them in the right way. That includes the customer experience, cross-selling, leadership effectiveness, ownership. And this is what creates a true pay-for-performance culture, one that aligns with leadership accountability, financial outcomes, impact and long-term value creation.

So to close, everything I've talked about today from our foundation to sustaining that really reinforces the core principle, strategy only delivers when people execute it with clarity, accountability, discipline and commitment, right? We have a culture where we have driven disciplined integration into it, right? It's grounded on our shared purpose, our values and consistent execution standards across all regions and businesses. We're building that high-performance customer-first culture where our teams run towards challenges, not away from them. They're solving the problems, removing obstacles before customers even know they have them, protecting that uptime in that yield, ensuring we have long-term partnerships, right?

Our capabilities are built through depth. We are spending a lot of time investing in our food scientists, our processing experts, our customer-facing employees. We want them to scale, innovate and respond with speed. We've implemented unified systems, harmonized incentives, talent programs. This reinforces our strategy, right? We want to get results in the right way. And this is an organization that's designed to execute. I'm really proud of what we've built and how we've gone about doing it. We're excited about our journey, and we welcome you to join us.

With that, I'll turn it over to our President of JBT Marel, Arni. Thank you.

Good to see you again. What I want to show you now is how software and digital are playing an important strategic role in addressing our customer needs, strengthening our integrated value proposition as well as improving our competitive positioning. There is an accelerating demand for processing insights and increased uptime with our customers. This is due to margin pressure, complex operating environment and evolving consumer preferences. And this kind of is where software and digital can play an important role in helping addressing those demands.

We are uniquely positioned to capitalize on this demand due to our broad offering, deep process and application expertise through our people as well as the experience that we've had over many years in building and deploying software in the food processing space. This will not only drive our software business forward, but through strengthening the integrated value proposition, it will help us to sell more equipment and more service. And with digital tools, we're able to take service to the next level, like Augusto talked about, with prescriptive maintenance and other tools, remote support, which will really help our customers in their operation, it will also deepen our relationship with our customers as well as lower the cost of delivering service.

All this together will allow us to capture a greater share of wallet and grow our long-term recurring revenue. So if we go deeper into the accelerating needs from our customers and how digital and software are playing a role there. There is a new generation of operators that are more digitally savvy, and they actually just want to use data to run their operations.

Uptime and machine performance is becoming more important, like we've talked about, due to the fact that machines are becoming more sophisticated because of improved yield and throughput and so on, and there's scarcity of skilled labor to maintain and service those machines so they rely more on us. Then Brian talked about how we're moving more to a more output-oriented food processing space. And that means our customers need to manage their processing lines more holistically, and they also need to make sure that they are fulfilling the customer orders that are coming in often at 2:00 p.m. for same-day delivery. Then there's a growing need for traceability, both in the food processing space, but also across the value chain. This is to ensure regulatory compliance and food safety for consumers.

Before I go deeper into software and digital, in particular, I just want to take this step back and really talk about the integrated solutions that we kind of repeatedly mentioned today, and it's not without a reason. It's because of it and kind of how important it is. We really need a seamless integration across the equipment, service, software and the application expertise. It's around our equipment, it's around our people and the knowledge that we have, but we're really bringing that together to achieve the most sophisticated level of food processing. Each component here reinforces the other, so the whole is greater than the sum of the parts. And this is what we're focusing on to achieve the next level of efficiency, and software digital are a piece of this overall picture.

So let's look at our product offering. We look at it through kind of we have 3 product families high level in terms of how we look at it. In machines, we're focusing on remote support. We're focusing on prescriptive maintenance and overall equipment efficiency. And this is to achieve the performance of the machines, the uptime and so on.

On the line side, what we're doing there, that's where we're taking multiple pieces of equipment and making sure it works seamlessly as one system. It's to make sure that the product flows smoothly, it's to be able to have full traceability on each piece, it's to be able to use data across the line, upstream and downstream to optimize in a complicated operating environment.

On the factory side, that's where we're creating visibility across different sites to help our customers manage their business, but also help to integrate our solutions into the IT infrastructure of our customers. So with this breadth, we're able to tailor our solution to the needs of the customer just depending on where they are in their journey. And that's really the value of this broad offering that we have.

All these different products require a really strong digital backbone. And therefore, we have one comprehensive scalable platform to support all the whole -- in all the 3 different product families. It's a platform with strong cybersecurity, cloud and data infrastructure that also enables AI optimization. We are obviously bringing JBT and Marel together, and the 2 platforms, we're kind of well on our way to integrate those and will be done by the end of the year, and this will be with very limited customer impact.

What I want to show you now is a video kind of how our solutions work in real time in a poultry plant. Go ahead.

[Presentation]

This is a good representation of what we do. And there are really kind of 2 key takeaways here. You really see the opportunity that we have with our broad offering. Roger talked about 800 different kind of machine codes in a poultry plant. So being able to have that broad offering, being able to understand the process, collect the data at different points, weighing at 5 different places just in the primary process with over 50 pictures, managing a process at 250 birds per hour, kind of that's the essence of what we're capable when we start to bring these things together.

The other one is really the integrated solutions that we've talked about. You see kind of -- you can get the insights into the control room in the dashboard, but that's not enough. You need to get the insights and then you need to use that in real time. And in that, kind of with that speed, you really need to understand the process and have the deep integration into the equipment. That's really the essence here that I hope you can take away from the video.

And it also speaks now to kind of why we're so well positioned in the market. With our unique software offering, that's really built through all of these different components. It's built through having the broad offering. It's built through the process know-how and the application expertise. It's built through kind of the experience of our people of building and deploying software and digital tools in the food processing space. And it's really the secret sauce of all these different components coming together.

If you look at some of the other players in the space, they might have a piece of it, but they don't have that full suite that you really need to do to be able to deliver on that customer need. If you look at the enterprise players, they're really good in that space, but they don't have the integration with the equipment or the process know-how. If you look at the shop floor vendors, they have some automation capabilities, but they are not used to working with the raw material or understanding the context that, that machine is operating. And if you look at some of our more traditional peers, they just don't have the breadth and the experience, kind of the breadth of the offering and the experience when it comes to digital and software solutions.

So we have the scale, and we are furthest along. And that is creating our unique position and competitive advantage in this area. Our focus areas and development priorities are on multiple fronts. We're obviously very focused on bringing the platforms together and being done with that by the end of the year. But then we're also on the machine side, we're onboarding more and more equipment to our platform to be able to deploy digital tools, use the insights to help give customers insights such as kind of what's your energy consumption, okay? What's the usage of these spare parts? And when do you need to swap it out and so on? So that's really onboarding more equipment to the platform.

On the line solutions, we showed you some of the capabilities that we have in poultry. And to be honest, like we're furthest along in poultry. But it shows you the opportunity that we have elsewhere. So we're using that knowledge and capabilities to develop that for other end markets and other parts of the value chain where we don't have as comprehensive solutions as today.

Then as we train our models and basically train and use the models around the solutions on kind of prescriptive maintenance, production planning and performance management, I mean we are using AI in that arena. Bob gave us a great example where we're using kind of vision technology and AI, and we're doing that here as well.

But the key point here when it comes to it is to be able to train the models, you need to structure data and you need to understand the process, and you need to have the application know-how because that's how you train the models that we use when it comes to digital and software kind of insights. Not only that, you need to be able to use the insights, and that's where the integration with the equipment comes into play, like I talked about around the video. And this is what we bring to the table better than anybody else due to the fact of our offering and being able to bring all those different pieces together.

There are 3 main levers that we're focusing on to drive long-term value creation. The first one here is we're expanding our offering, kind of use cases and solutions to have a more enriched offering. The second is around acquiring more customers that are using our tools and capabilities. And then the third one is around growing with our customers and capturing a greater share of wallet. This will allow us to grow our revenue, especially the recurring revenue through service, and software subscription and capture this greater share of wallet that I mentioned.

So to summarize this, there is the accelerating demand through -- of processing insights and increased uptime. And that's where our tools play an important role to address that demand. We have the most comprehensive offering to address the customer needs. And then we have the secret sauce of all the different pieces coming together to have a strong competitive advantage in this part of our business. And this is also one of the key levers that we will use to grow above the market.

With that, let me introduce our CFO, Matt Meister, who will give us some insights into our financials and outlook. Thank you.

Thanks, Arni, and thank you all for your time and interest in JBT Marel today. Many of you know me as I've been the CFO since 2020. Before joining JBT in 2019, I had over -- almost 20 years of experience in global diverse industrial businesses. You've heard a lot today, a lot about strategy, about our markets and about our technology. And I think it paints a really compelling picture of what JBT Marel is about and where our opportunities are going forward. And now I'd like to bring it all together and put some numbers and expectations with it.

Let's start with some key points I'd like to touch on during this part of the presentation. First, we've been very successful in executing on our strategy, delivering comprehensive solutions from a customer-focused organization, which creates a really unique customer value proposition and enables the earning power of our business.

Second, we have strong end markets and market-leading technology. By bringing these 2 businesses together, it gives ourselves the opportunity to unlock revenue synergies and grow at a potential rate above market growth.

Third, we have leverage available to us within our business to significantly improve margins. We're continuing to execute on the synergies and that relentless continues focus and continuous improvement.

And fourth, we have a robust cash flow model that supports our organic and inorganic growth opportunities. If you put all that together, we have a great platform for significant shareholder value creation and attractive return trajectory.

Now let me dive into that value creation algorithm here at JBT Marel. Starting with the growth drivers. We've discussed this a lot today. You heard it from many of the presenters already. It was resilient end market. We have secular tailwinds that's really supporting the business. We have that unique customer value proposition that Arni just talked about. All of that supports that above-market growth rate that we're expecting over the next 3 years.

As I mentioned before, within JBT Marel, we have a set of levers to really enhance margins. Favorable mix of recurring revenue, our focus on continuous improvement and again, execution on those cost synergies that we developed during the integration process early on. A combination of sustained growth and disciplined focus on margin improvement with our cash flow model really builds this powerful engine for differentiated financial performance and significant long-term shareholder value.

Now let me walk through the components of that value creation engine and how it translates to financial outcomes. As many of you know by now, we have recently resegmented into 2 segments: Protein Processing Solutions and Prepared Food and Beverage Solutions. Both of those segments serve very attractive markets. They benefit from that inelastic demand for food and beverage. They have those secular tailwinds that we talked about with population and income growth, changes in consumer tastes and preferences, which drive our customers to have to innovate and invest. And they also have these complex operations that Roger and Bob talked about, which requires investment in automation for the lack of labor available to work on the lines as well as needing to enhance yield and reduce cost of production.

And as you heard, JBT Marel is uniquely positioned with our technology and our full-line solutions as well as that domain expertise to meet those evolving customer needs in this complex environment that they operate in. By putting the companies together, we can leverage this unique customer value proposition, and it's all enhanced by revenue synergies. These integrated solutions that we introduced to the market as well as our go-to-market strategy has really resonated with customers over the last year, and it's given us the confidence to be able to increase our expectation for revenue synergies over the next 3 years. These synergies are the result of full-line connected solutions that we're able to sell across our various segments and gives us a distinct customer -- competitive advantage in the market.

A good example of this, Bob talked about it a little bit, are the 2 QSR lines that we won in '25. And in those lines for nuggets and burgers, we're able to deliver technology that allowed for us to prepare the protein, form it, cook it, freeze it, and provide end-of-line applications. That's something that we could not have done as stand-alone companies, now putting them together, we can actually do that now.

And when you combine this unique product offering, the scale that we have as a combined company provides us with the opportunity to succeed in underpenetrated, faster-growing markets like Latin America and Asia Pacific. And I think we demonstrated some really solid wins here as well in 2025.

Collectively, these revenue synergies are expected to provide approximately 100 basis points of incremental growth, which is included in the [indiscernible] targets that I'll share with you here in a minute. So I've discussed the growth. Now I'd like to talk about some of those profitability enablers.

Starting with cost synergies. As we reported in 2025, we made significant progress on actions from our integration plans. We realized $43 million in synergies during the year, and we exited the year with a run rate of $85 million in synergy savings. As we look ahead, we expect to continue that momentum and deliver a higher mix of supply chain and manufacturing initiatives, which includes value engineering activity, further supplier consolidation and select footprint actions. And based on that success and actions that we've taken, we're very confident in our ability to remain on track to deliver that run rate of $150 million in savings by the end of 2027. That's a key contributor to our expectation of delivering over 400 basis point improvement in margins by 2028.

Beyond those synergies, margins will improve from our relentless focus on continuous improvement. And that's taking hold across our organization. As you heard earlier from Brian and Shelley, continuous improvement is core to our culture. And we're embedding that cost discipline and focus on operational efficiency across our various sites. And we're focused on optimizing the supply chain as well. In 2025, the team did a great job harmonizing the process and starting that process of harmonizing our supply base. That will continue.

We've also started work on value added, value engineering, where it allows us to align common components across our various pieces of equipment. A good example Bob brought up earlier in the presentation is that standardization of control panels. It does sound straightforward to some extent, but a project like that was able to deliver 40% to 50% reduction in the cost of the panel while also improving lead times and installation times. It's a true win-win for our customers and for our business.

Finally, we have a large number of manufacturing facilities across the globe. Some of those operate in lower-cost regions such as Brazil and Eastern Europe. And some of those -- and those facilities have capacity. And in 2025, we began the effort of moving some of our production to those lower-cost facilities. And as that continuous improvement work continues, we're able to free up more capacity in these lower-cost locations. We'll continue to evaluate more opportunities to deliver more savings within our operations going forward. Altogether, these actions create a durable margin improvement engine that will sustain profitability and growth into 2028 and beyond.

So we spent time on growth and margin. Now I'd like to talk about the cash flow and capital allocation model. Our cash flow model has a number of favorable characteristics. First, we have a stable foundation with resilient markets and almost 50% revenue that's recurring. As we've seen historically, that constant drumbeat of food and beverage production requires our customers to continue to invest in their equipment and maintenance despite changes in economic conditions. Our business also benefits from a relatively low level of capital intensity.

Working capital as a percent of sales we're estimating is going to run around 6% to 7% as a percentage of revenue during the next 3-year period as well as our businesses operate in a relatively asset-light way because they focus more on engineering, assembly and test. Because of that, we have a relatively low level of CapEx at about 3% to 3.5% of revenue. This positive cash flow profile, along with lower interest expense and lower onetime payments as the integration intensity starts to come down here at the end of '26, we're expecting free cash flow as a percentage of EBITDA around 55% to 60%. That translates to over 10% of revenue. And during this 3-year period of time, we're expecting cumulative free cash flow to be well over $1 billion. This will continue to strengthen our balance sheet and give us the flexibility to support our growth initiatives while also maintaining a disciplined approach to capital deployment.

Speaking of the balance sheet, so this is something I'm really proud of the work that we've done this past year. I learned earlier in my career the importance of having a high [indiscernible] ratio. And I think we really delivered that here in 2025 by reducing our leverage from almost 4x at the close of the transaction to less than 2.9 in 12 months.

Looking ahead, based on our strength of our cash flows and our continued improving profitability, we have a clear path to getting close to 2x by the end of 2026. That's well within that target range of 2 to 2.5x that we have.

Additionally, the team has been working to implement a stable and flexible capital structure with a well-staggered maturity and a prudent mix of low-cost fixed debt as well as moderate floating rate exposure. And as you may know, we have a fairly large footprint in Europe, and we've been able to leverage that along with the derivative markets to access to lower-cost interest rates in Europe. It has really been able to deliver a much lower interest expense, and you saw that in our Q4 results and what we put in our guidance for 2026.

Overall, this strong balance sheet and liquidity provides us with flexibility and foundation to maintain that disciplined capital deployment approach that we've taken in the past and continue to focus on long-term value creation. And our capital allocation priorities are clear. In the near term, we are focused on the integration. We're going to use our cash flow to continue to delever to that target range of 2 to 2.5x while funding investment to support growth and innovation, all while maintaining our current dividend. Long term, we expect to deploy capital, again, using that disciplined approach that we've shown towards strategic M&A and opportunistic share repurchases.

Speaking of M&A, as we wrap up our integration focus, we expect to reset capital deployment focused on strategic value-enhancing inorganic growth. We're going to do that with a defined set of strategic and financial criteria. Strategically, we're looking for businesses that have market-leading technology that we can integrate into our portfolio and sell globally through our commercial teams. We're also looking for businesses that have the ability to add to our opportunity to deliver full-line solutions, able to sell those across our various businesses. We're also looking for businesses that have the opportunity to grow and enhance our recurring revenue stream.

Financially, we're looking for opportunities where we can deliver double-digit cash ROIC by year 3 for smaller acquisitions and years 4 or 5 for the larger, more strategic ones. We're also looking to structure these in a way, we have a clear path to value, to accretive EPS on an adjusted basis as well as a clear path to a comfortable leverage range within 12 months.

Let me talk about the actual targets. And here, we're showing a meaningful step-up across both top line growth and profitability. The compounded annual organic growth rate of 5% to 7%. Adjusted EBITDA margin in 2028 of 20%. Again, free cash flow conversion as a percentage of EBITDA of 55% to 60%, which translates to 10% plus revenue. And again, double-digit cash ROIC by 2028. We're confident in these targets because they're grounded in those growth and profitability drivers that we walked through earlier today and that you heard so much about during the presentation.

And now I'd like to give a little more specifics around the revenue and margin growth targets that we have. Starting with revenue and our base for 2025 of $3.8 billion. We start with the market growth and the secular tailwinds of population and income growth, those ever-changing consumer preferences that drive investment in our customers, the increasing need for labor-saving and yield-enhancing solutions. On top of that, more complementary technology and bringing the 2 businesses together, we expect another 1% above that from revenue synergies. And finally, we have additional 1 to 2 points of growth through key initiatives that all of our businesses have. Those are focused primarily on customer-centric service model, that differentiated software and digital capabilities that Arni talked about and this full-line integrated solutions. Again, taken together, this should drive a compounded annual growth rate of 5% to 7%, which is nearly 2x market growth expectations that we have.

All right. Now let me move on to margins. We talked today, it's not only about growth, but it's about profitable growth. And this slide provides primary drivers to achieve that 20% margin target by 2028. Let's start with margin expansion from incremental flow-through. Our estimate is that we should see flow through in the high 20% to 30%. That includes not only operating leverage but also the incremental investments required to achieve that growth. On top of that, we expect meaningful contribution from the synergy savings. We expect to deliver almost $110 million over the next 3 years in synergy savings as we continue to execute on that progress and success that we saw in 2025.

And finally, to roll out the JBT Marel business model and that relentless focus on continuous improvement, it supports further margin expansion through disciplined cost management and operational excellence. Based on that momentum that we built in 2025, these drivers reinforce our confidence in delivering sustained margin improvement alongside that top line growth.

Okay. I've outlined the revenue and margin profile for the total company. Now I want to move into some expectations for the segments. We expect both segments to achieve mid-single-digit compounded annual organic growth, also while significantly expanding margins.

In the Protein Solutions segment, we're expecting significant growth in 2026, primarily from that backlog that's been built in the poultry business in late '24 and throughout 2025. Then in '27, we expect that growth to plateau a bit while the customers digest some of the investments they made, then recovering and growing again in 2028. And while we're optimistic cautiously about the recovery of the pork and fish market, those businesses will continue to deepen their position with existing customers and cultivate new relationships with the ever expanding capabilities of the combined company.

Moving to the Prepared Food and Beverage segment. We expect more consistent year-over-year growth from this segment, although we do expect it to be slightly lower than the Protein Solutions segment. These customers in this segment are continuing to invest in convenience foods, specialty beverages, premium packaged foods and pet food. And both segments are dedicated to improving that customer experience and aftermarket support. And we're expecting to see continued growth in recurring revenue at a slightly higher rate than we expect to see equipment during this time.

Let me wrap up with a few key takeaways before I hand the presentation back to Brian. As you've heard throughout the presentation, we are successfully executing on our strategy designed to deliver long-term earnings power, evidenced from our results in 2025. With our resilient end markets, strong fundamentals and unique value proposition, this allows us to unlock revenue synergies through fuller line solutions and integrated -- fuller line integrated solutions and delivering consistent, solid mid-single-digit organic growth in excess of market growth rates. And that growth will increasingly be profitable as we combine our continuous improvement efforts with the ongoing synergy realization to deliver 20% margin in 2020. And with that profitable growth plus our strong cash flow profile and our clear disciplined capital allocation priorities, we believe that will deliver an attractive ROIC trajectory and long-term shareholder value.

Again, I want to thank you for your time and interest in JBT Marel today. Let me hand the presentation back to Brian. Thank you.

Thank you, Matt. Well, that was a lot. And I hope you really understand and got the clarity of what makes JBT Marel special. The depth of our technology, the breadth of our technology, building an ecosystem around that to create a sustainable, competitive advantage. And you saw some of the -- our key leaders today. We see the strength of their experience and their knowledge within the industry.

You bring all that together, what's the story? We are executing on our transformation, on the integration. We've had a great first year on that, more to do. We're extraordinarily confident on our ability to do it. We have compelling end market exposures with critical continuous secular trends where we're well aligned with on protein consumption, on prepared foods, on convenience foods, the proliferation of different dietary preferences, we are there to support that.

And we indeed have a differentiated value proposition. We have best technology in the industry. We have the most breadth and depth within the industry. We will add to that with M&A in areas where we aren't as advanced in certain places. However, as we sit here today, extraordinarily proud and feel indeed, we have a very differentiated value proposition by the benefit of bringing those technology solutions together with the service, the software and our food expertise.

We have an amazing resilient recurring revenue model. Our installed base of over 200,000 pieces of equipment allows consistent interface with our customers, supporting them on that day-to-day challenges they have in delivering outcomes. And we continue to invest in our service and our commercial organization to support that ongoing recurring revenue model and support our customers' success. We continue to deploy operational excellence across our company through continuous improvement efforts.

So beyond 2028 in our synergy work, we will continue our margin expansion. We have plenty of opportunities as you make us -- as we make ourselves better, not just from a cost perspective, but from a competitive perspective. All that together will deliver meaningful and differentiated shareholder value.

So very excited to have shown all of this to you today. I am very excited. I know the team is very excited. And thank you for joining us here today.

All right. I'm going to hand it back off to Marlee, and we'll talk about a little bit of the logistics. Thank you so much.

Okay. Thank you, everyone. It's just going to take us a few minutes to get set up. But while they're doing that, I just want to go over a couple of items for those of you in the room.

As I mentioned earlier, we do have a couple of my team members here with mics. So when you have a question when we open it to the audience, if you can just raise your hand, give them a minute to get you a microphone. The microphone is going to be important so that those on the virtual webcast can also hear the questions that you're asking.

We ask that you state your first and last name, and limit your questions to a question and follow-up, and should there be extra time, we're happy for you to jump back. Thank you. Thanks. Just give us a minute.

Okay. We have the full team I appreciate it. So we've got a lot of water just in case. We got this question a lot from our online virtual audience. So I'll start. It sounds clearly like we're very focused on full-line solutions. Could you explain from the customer's perspective why this matters versus a best-of-breed approach from multiple vendors?

Sure. I'll start, and I'll hand it off to perhaps Roger and Bob to give their perspective. And indeed, if you're a competitor to JBT, certainly, you would argue that any one individual piece of equipment can match and even in some cases, beat a JBT Marel technology.

But the differentiation of having everything together, and you saw it from the software video and you saw it from the conversations is it's not about a piece, it's about the system, it's about the orchestra, not an individual instrument. So the optimization as you go from the beginning to the end throughout the entire facility is really critical in turn to optimize that output. If you focus on the output, that is where you get the benefit.

Roger, can you give your thoughts on that?

Yes. Thank you, Brian. I think it's a very good question, of course. If you look to, let's say, the challenges of our customers, and we elaborated on that in the presentations on food safety, a number of SKUs, increasing more output. There's a lot more at stake at the moment. And therefore, that combined with their own capability of matching all those components together, what is better than a one-stop shop, meaning that we, as JBT Marel are in a super position in order to connect those environments.

But I need to explain this also to others. It's like if we all drive a car. And in the past, everyone would have a car steady. That was a little bit different today, we think it needs to be integrated in the car. That's where our customers are developing as well. And there, I think we are in the best position going forward.

Bob, do you have something to add?

Yes. I'll just add to that. But as Brian said, our customers are really looking for outcomes and output, and nothing frustrates them more than multiple suppliers where they're like pointing fingers each other when they have a problem. They're looking for one accountable partner to take care of their production.

Great. I think there's a question in the back. Let's see.

Great. [ Adam Seiden ] from Barclays. Just two questions, one and then the follow-up as promised. There you go, Marlee. So could you talk through a little bit about the 3% to 4% market growth that you're expecting? And how you expect that to vary amongst the different end markets that you're talking to? Clearly, 5% to 7% you're targeting for JBT Marel versus the 3% to 4%, poultry is a big part of the business, and that's above it. But how does that vary as you get through the broader business?

Right. So speaking specifically to the 3% to 4% market growth along with the others that we will do. So it is very broad because food is a constant never-ending drumbeat. Now that will shift from individual market to individual market through the years, we never see everything perfectly aligned. What we do see is ups and downs throughout, but when you add it all up, and it's almost magical because every year, you see that consistent growth at consistent investment as people focus on things that are important to them, automation, margin expansion. Remember, food is a relatively low-margin business in the grand scheme of things, it's about volume, but our solutions bring that margin improvement to them.

So that constant drumbeat of the need for automation, the need to feed mouths and the trends on protein consumption, the continued needs for consumption of prepared foods, that's always there. And then our advantage on top of that, which we just talked about was that full-line solutions, the ability to do more with the whole than perhaps others can do is what drives that incremental growth.

Anything else you want to add, Arni?

Yes. Maybe just -- I mean, as we're looking kind of with the numbers that we're putting out, I mean it's over the next 3 years. So there is obviously kind of we can have recovery on some of the protein markets that are kind of playing into this. But then I just want to emphasize the overall trend is towards more value-added solutions. So more cut up or more prepared foods. So we also see kind of a nice tailwind and kind of have a secular trend on that part of our business.

Any other questions from the audience?

Just a follow-up for me was on the aftermarket share capture. You guys spoke to 40% today, you're striving to get to 50% in the target. Is that 50% embedded in the plan by the time we exit it?

Not by 2028, that's going to be a continuous journey, right? That's a longer-term target. We will continue to make trends within our model. We do show higher recurring revenue growth than equipment growth. It will take more time beyond 2028 to get to that number.

Thanks, Adam. Any other audience questions? Ross?

Ross Sparenblek, William Blair. Maybe just start with the parts. Could you maybe help frame the path and the time to get to the 50% plus? And then also, is there a natural ceiling here on where this can go? I mean could parts get to 2/3 mix over time?

Right. So I would say it would take somewhere in the range of 5 to 7 years to get to that 50%-ish. If you look at premium industrials, that way you can see outside of the food industry, best-in-class are typically in that 50% to 60% range. And the reason you'll never get to 2/3, 70% is 2 reasons. One, sophisticated customers also have their own internal service departments, right? They can -- if they have enough scale, they can bring a lot of that to their own operation. They also may have sophisticated procurement departments, which can try to buy some of the, I'll call them more standard parts that they can find on the open market. But where they struggle and where we obviously shine quite well is on the more sophisticated repairs, right, as well as the more proprietary parts or what not.

Augusto, anything you want to add to that business model?

I think you covered it well, Brian. I would say also the expertise that we bring, as you said, into those unique products. I think that's a key value proposition that we add. But also the investments that we are doing now in terms of this distribution network, which guarantees, as I mentioned during my presentation, the parts availability, which is key for providing a best-in-class service model. I think that's another key component that will take us to the 56%.

But as we develop that critical parts distribution model, that really materially helps, right? If you get that on-time delivery in 24, 48 hours, that high, very high fulfillment rates, less stock outs, et cetera. So as we advance that very sophisticated distribution model, that will materially help us move up that chain. But that does take a little bit of time.

That's helpful. And then just when we think about growth investments, maybe for Matt, can you help us size what needs to be put in place to kind of realize that 110 to 130 basis points? Then also on the R&D spend, should we think about kind of the 3.5% range as a natural target as we look out the next couple of years?

Yes. I think from an investment perspective, I mean we're investing in resources on the teams to be able to help that growth, right? We need to make sure we have, as Augusto said, the right people in the right places to do the service. As our installed base grows, we need to have more of those people available to actually provide that service. So a lot of that investment is in resources and the people that we need to support it. We'll continue to invest, as Arni said, in the software and digital space. We can continue to build that out as that's a critical part of the service model that we're building out.

So those 2 are big pieces of it. And just with volume, we need to have some resources to support that volume growth. And then in terms of R&D targets, I don't -- we don't have a target number in mind necessarily. I think that number makes sense. But I think in our mind, we're looking to allocate resources towards projects and opportunities that have the best returns. And so is it 3.5%, is it 4%, we're not putting a number on it. We want to make sure that we put enough resources towards innovation that we maintain that market-leading position that we have.

Okay. Thanks, Ross. Maybe an online question. Arni, there was a lot about software. Could you speak to specific plans to monetize the data and software that we've implemented in the business?

Yes. That's a great question. And there is kind of -- there are actually multiple ways to do that. I mean, we've talked about a few of them today. So one key lever that we're looking at is strengthening the value proposition on the service side. So Augusto spoke about how do you embed some of the connected services just into an overall service contract that then will allow us to capture that kind of greater share that we just talked about, how to get to that 50% level.

Other elements that we're looking at is strengthening the value proposition of an integrated system. And the essence there is like we're strengthening that value proposition, and we're not overly focused whether, a, kind of do we capture the volume through the equipment or the software, it's really around the value that we're creating for the customer.

But we will have opportunities to kind of charge for the software in some cases. So it really depends kind of where we are looking, like on maybe just one more example is for ovens, that's where a lot of energy is used, then you might be able to kind of create a package around that. So it kind of really varies and it's really focused on kind of what's the customer value proposition that we're able to deliver.

[indiscernible] KeyBanc Capital Markets. Thanks for all the good detail. Just as we think about customer consolidation and them gaining share, and then thinking about going from machines to full end solutions, how should we think about those moving pieces from a mix perspective? And then just on your volume growth number, what are the underlying incrementals just on that volume piece ex the synergies?

Sure. So I'll start. So the food industry does continue to consolidate, right? I think what you often see is upstart brands really provide that innovation into the food world. And then the larger players tend to buy those up and obviously have their own innovation models as well.

We do have a fairly broad mix of still selling component sales versus full-line sales. So it's very much a mix. I would say, certainly, the trends are as we've stated, a fuller line, a more integrated model solution. I would say we are probably still less than 50-50 on full-line versus individual pieces of equipment. But it does vary quite a bit on the different businesses we have. Meat and poultry tend to have more fuller line solutions. Some of our beverage solutions tend to be more components and what not in preservation. And in part, we don't have as broad of an offering. So we do need to invest both from an innovation perspective and adding those building blocks to get us that capability as well as from an M&A perspective.

May I add to it. So it's when we talk about a full-line, and when I spoke about a poultry full-line about 800 building blocks, if you look, let's say, 10, 20 years ago, those were only 500 to 600 building blocks. It's about building up the line, and we are not telling our customers that they need to rebuild everything completely. The modular setup means that you can expand and you can grow with the business. And every 2 machines together is already aligned, maybe not a full-line, but that's where I think the strength comes of JBT Marel, being able to have these building blocks and bit by bit, the customer can, if he wants, if he sees the value proposition of us, we can extend the line until at a certain time, we have the full-line because let's face it, you're not every year building a completely new house or a completely new plant. You want to have it ready for the future. And those are the building blocks that we are able to provide.

And I think you're talking about the incremental growth in margins on the incremental growth. Yes. It depends, obviously, on the business where the growth is coming from and the mix of recurring and nonrecurring revenue. But overall, on average, we're expecting incrementals at the high 20% to low 30%.

Okay. And then just a follow-on on the synergies. As you look '26, '27, you listed kind of supply chain procurement, VAVE, back office footprint. How would you rank order those or bucket those in terms of the magnitude of opportunity?

The supply chain, the procurement side is the clear largest opportunity given the benefits of the 2 companies to come together and the scale that we now have in the marketplace, and the ability to commonize parts, to commonize and build and create these building blocks that Roger has talked about and then Bob has talked about. The more you can standardize the components, the more you can get meaningful. So that is, I would say, the clear #1 in that strategy.

I would say, the ongoing SG&A and footprint optimization. And it's not just about the footprint optimization, it's about operating optimization, meaning putting the right things in the right place, it's taking advantage of some investments and underutilization in certain areas and maybe some constraints and higher costs in other areas.

So it's about the mixing and the matching. It's about the regionalization with tariffs. We have to make more in the U.S. than we would have had in the past, right? So we have that operating footprint here. So I would say that as well as the SG&A are kind of a [indiscernible] hand in hand in terms of scale. I will say beyond 2028, the continuous improvement as well as that facility, the operating footprint, that operating optimization will continue beyond 2028.

Justin Ages, CJS Securities. Can you talk a little about the push and pull dynamics in terms of equipment orders? How much of the customers coming to you guys, want an upgrade? And how much is your sales team going in and saying, you've had this piece of equipment for a while, you should upgrade?

Yes. Maybe I'll have Bob. Bob is pretty close to that. You want to talk a little bit about that?

Yes, sure. I mean we see a combination because we have such really good relationships with our customers. We kind of know what equipment they have in their facility. We're in there all the time. So we kind of know when our customers are needing to replace capital equipment. But you are right, there are some occasions where customers will approach us as well. So it's a little bit of a combination.

And then one on capital allocation priorities. You mentioned as you shift towards lowering the leverage, you're going to have taking a greater look at M&A. So how full is that pipeline now? Are you just beginning to build it? Or are there a lot of ideas that you guys have kept in mind?

Sure. Well , certainly, for the last year, we've been extraordinarily focused on the integration, and we haven't had outward reaches and whatnot to develop the pipeline. That said, we know the industry very, very well. We know the players very, very well. Bob and Roger and Augusto and our other leaders are constantly kind of keeping things in mind so that when the time -- when we are ready, that pipeline can fill very quickly. There will not be a lack of opportunities.

I would say, as we roll through the end of the year, and get to those target levels of under 2.5x levered, I think that's when we won't perhaps start more formally building that pipeline perhaps for some investments in 2027 and beyond.

Maybe shifting gears. The online audience is curious about what cross-selling metrics we have in place to achieve revenue synergies and grow the service model.

Great. So I'm going to Shelley talk a little bit about how we incentivize, and Bob and Roger and Augusto can chip in as well as you see fit. But how do we think about from an incentive perspective and just an operating cadence, how we're promoting cross-selling.

So when you think about incentives, right, you're trying to drive a certain behavior. And previously, our behavior was about selling a product. Now that structure has changed. It's about collaboration, it's about cross-selling.

So we have metrics very much focused on people collaborating together to bring existing technology together to sell it to the customer. And so we reward for that behavior. And there's no losers in that reward, everyone gets rewarded for the cross-selling. So that really has been our focus around driving that collaboration behavior and driving that customer-facing behavior that we've talked about to bring that technology to those that need it.

And more operationally?

Yes. So we talked about our go-to-market model being more of an account management model. I think it's probably useful to know that in our history and our background, a lot of our commercial teams were very much focused on individual products. So if you can imagine through M&A over the last few years, you buy a company who may be an expert in packaging, their lens in the market is through the lens of packaging. Now we're changing that and having more account management model so that we're looking at -- when we go and visit a customer, they're looking at what process and equipment do they need in that facility. And then where we identify a need, we then bring in like an example, a packaging expert if that's required in that facility. So it's a very -- it's a big change in our model, and that's one that we've seen as now to show results.

Exactly. So it starts with the organizational design and the go-to-market strategy with the account model. That's the single most important factor.

Two, it's the incentive structure that Shelley talked about that there is no disadvantage for selling someone else's product, if you will, when you reach across the businesses. So variable compensation is very structured to promote cross-selling. And three, all of our salespeople and sales leaders have targets for cross-selling as well.

Any questions from the audience? There's one in terms of automation trends. Can you speak to what you're seeing from our customers from an automation perspective and if we're innovating around any specific areas?

Yes. Roger, you want to talk about that specifically as to proteins?

Yes. In proteins, I would say automation is, of course, of all sectors. It's more about, how can we reduce, let's say, the labor content, inspection content because it's all about the scarcity of labor. And especially then also between brackets, simple jobs of packaging, inspection, et cetera.

So automation will continue. And I think what we see now actually 2 trends, robots or sub-robots working side with people on the line to inspect and getting more and more sensors and, let's say, field and camera systems in order to assess to achieve higher throughput and yield.

So let's say, in this case, with AI and other machines that start to regulate themselves, that's also a form of automation. And therefore, those small incremental steps have big results, and those are the trends that will remain in the coming years going forward. Combined with software and digital packages like also Arni explained.

And you specifically had called out when you -- the percentage of poultry factories that are still using manual labor to cut up.

Yes. So there's still a way, a big room to go forward, especially what -- in the secondary environment, there is actually where all the number of end products are created. And in some parts of the globe, still, let's say, there's almost 50% of manual labor that could be or can be automated with the solutions that we have. So the market is pretty good.

So the biggest opportunities remain where you have humans cutting things, sorting things, inspecting things and moving things around. There's still -- if you've ever been to a food factory, there's a tremendous amount of labor doing all those things, and that's where the largest opportunities are.

Okay. There's a question regarding the ProCare contracts that Augusto spoke to in his presentation. Do we have an estimate for how much percentage-wise we have ProCare contracts attached to equipment? And how do we monetize that?

Right. Maybe Augusto and Roger. The short answer is it is very end market and business dependent. But you can give a little bit of color on what that means.

Yes. I think it really varies from what is the product and the end market that we apply in the ProCare service agreement. We are still developing some of the product, building that capability so we can offer that ProCare service agreement. But it really depends that our product lines that we have close to 15% to 20% of the installed base already leveraging that type of benefit and there are, in some case, even higher.

But it's something that we continue to, as I said, to build the capability within the organization, leveraging the field service engineers in some of the regions that we don't have a strong presence as well leveraging some of the technologies that we spoke about, the digital, so we can improve the productivity and efficiency in terms of how we're running the service organization and they apply in digital as well. So that's a combination which is one of the key drivers, as I explained today, that will take us to achieve the share of wallet between 50%.

Right. Maybe to add to that a little bit, if you look to at least the faster-moving environment, we talked about 250 birds per minute for a second, especially in the primary area, a lot of moving pieces. You can imagine that if small mistakes or small interruptions will have a big effect. That's why customers more and more want to have this ProCare contract because it's a kind of security of uptime performance, et cetera. So in order of us being able to package, let's say, not only parts, services, but also advice on what to do, et cetera, you see that the attachment rate is increasing quite rapidly on that.

Exactly. So as we move down this delivering outcomes model, that's where the customers more embrace the SLAs, the ProCare contracts that go along with it. So in the areas like culture, we're further along, you see attachment rates upwards of 50% in other areas where that's less developed and the market continues to develop, it's closer to 15%, 20%. But again, as -- and this is exactly the point Augusto is making, is as you embed the software, the technology and the smarts and the prescriptive maintenance that you can develop with the software, with that bundle, then customers will continue to gravitate. So we do see that as a growing target for us.

And Brian, let me just add one -- another perspective that we are seeing also in the business, as our customers are starting to sign up for some of those ProCare service agreement, the renewal rate, it is also high. So we don't see customers, once they see the value, they stick with that, and we don't see that really going down. So that's another, I think, positive that we are seeing in terms of continues to promote and expand these capabilities on the ProCare service agreement, the renewal rate.

Great. Appreciate it. Any other questions? If not, I'll finish with a final question from our online audience. Could you provide some additional context around the value add, value engineering opportunities? In what areas have you seen the most progress today? And where are you focused moving forward?

Right. Bob is very close to that. Do you want to talk a little bit about where you see the opportunities on value add, value engineering?

Yes. I think the big opportunity we see is in product lines that maybe have more of an engineering to order type aspect to it. So driving standardization and modularization into those products could really transform the competitiveness of that equipment, and we've seen that in some of the projects that we've done. So I would say that's probably where we see the biggest opportunity. But there are some common features across all of our equipment range. I talked about the control panels today. That's one. There's a few other areas as well. So those kind of areas that give us the biggest bang for our buck.

Okay. Appreciate it.

Can I add one. I think the value add, value engineer is also a great opportunity when we are localizing products in some of our emerging markets that we play today. So South America, Asia Pacific because when we do these VAVE, it's not only about the technical aspect of the product, it is also an opportunity that we can go back and understand what are the true customer needs and re-feature some of those products. So when we do that, it's not only about redesigning, but it's also realigning the specification of the product to the specific customer needs that we have in some of those emerging markets. So I think that goes in any hand as the technical but also the product strategy, right?

Okay. Brian, I'll hand it back to you for any final comments before we close out the morning, early afternoon, which we greatly appreciate all of you tuning in for.

So again, thank you all so much for joining us here today. Hopefully, you can see the excitement that sits with all of this. And hopefully, you've learned some of the features about JBT Marel and why we brought these businesses together, right? That expansion in our offering to do things we otherwise could not do, and the attacking the market and taking advantage of some of these secular trends, as we're just extraordinarily excited about. The team is just really pleased to be able to put this all together in front of you. I know this has been in our heads for so long. And as we put the 2 companies together, going back to '24, but this was really the vision that we've had for some time. And so we're very proud to be able to present it to you. And again, thank you all for joining us today.

Thank you, everyone. With that, we'll go to lunch, which should be -- I'm sure you're all hungry, right out these doors where breakfast was.

And make sure you stop by the virtual hub to get -- so you'll get a more immersive view inside different food factories.

Welcome to JBT Marel's Earnings Conference Call for the Fourth Quarter and Full Year 2025. My name is Ellen, and I will be your conference operator today. As a reminder, today's call is being recorded. [Operator Instructions] I will now turn the call over to JBT Marel's Senior Director of Investor Relations, Marlee Spangler to begin today's conference.

Thank you, Ellen. Good morning, everyone, and thank you for joining our year-end 2025 conference call. With me on the call is our Chief Executive Officer, Brian Deck; President, Arni Sigurdsson; and Chief Financial Officer, Matt Meister. In today's call, we will use forward-looking statements that are subject to the safe harbor language in yesterday's press release and 8-K filing. JBT Marel's periodic SEC filings also contain information regarding risk factors that may have an impact on our results. These documents are available on the IR website. Also, our discussion today includes references to certain non-GAAP measures. A reconciliation of these measures to the most comparable GAAP measure can be found on our IR website.

With that, I'll turn the call over to Brian.

Thanks, Marlee, and good morning. What a remarkable year 2025 has been as we completed our first year as JBT Marel. I can proudly say we are meeting our commitments we made and are realizing the tremendous benefits of the JBT and Marel combination. As a combined organization, we posted strong revenue growth and significant margin expansion. We capitalized on the anticipated recovery in protein demand with robust investment from the poultry industry.

At the same time, we took decisive actions to improve the profitability of our meat and fish businesses. We realized meaningful synergy savings. Additionally, we saw an acceleration in our ability to capture order synergies over the course of 2025 as we integrated our complementary product and service capabilities. On the financial side, we achieved our goal of delivering adjusted EPS accretion within the first year of the transaction, and we exceeded the targeted deleveraging of our balance sheet. Looking ahead, we believe our continued strong orders reflect the exceptional value proposition JBT Marel brings to our customers.

I'll let Arni elaborate.

Thanks, Brian. From a demand standpoint, we benefited from our diversified portfolio and attractive end market exposure with full year orders of $3.8 billion and more than $1 billion in the fourth quarter. As anticipated, that performance was led by exceptional strength in orders from the protein end markets, especially poultry, which has seen a sharp recovery following roughly 2 years of underinvestment. For the year, meat, beverages and pharma were also strong growth contributors, while Prepared Foods showed improvement in the fourth quarter compared to previous quarters. Geographically, we enjoyed gains across all regions in 2025.

From a consumer and secular perspective, poultry continues to be a winning food category due to its affordability versus other proteins, its versatility in flavor adaptation and overall health benefits. In response to strong consumer demand and good economics from price/cost spreads, our global processing customers invested in core JBT [indiscernible] solutions that enhance production performance, improve yield and reduce labor costs. We are pleased that our customer-focused go-to-market strategy coupled with our comprehensive solutions spanning integrated lines, service, aftermarket support and digital connectivity led to order synergies. In fact, our ability to capture cross-selling benefits accelerated over the course of the year as our organizational design, product training, unified marketing and branding efforts took hold.

For example, our complementary technology in Prepared Foods allowed us to secure orders that included integrated JBT and model solutions for chicken nugget and hamburger processing lines. Our ability to provide leading technology across these full value chains is a key differentiator, helping customers create high-quality products with enhanced uptime and efficiency.

As such, an important part of our strategy is to invest to strengthen our offering to provide integrated solutions across all key product lines. All in, we captured $30 million in order synergies for the full year with more than half realized in the fourth quarter. Those orders are then expected to convert to revenue in 2026.

Let me turn the call over to Matt to discuss our earnings performance in 2025 and provide guidance for 2026, which reflects another year of solid growth.

Thanks, Arni. As Brian said, 2025 was a year of strong growth and excellent overall performance for JBT Marel. And as previewed last quarter, we recently released our new segment reporting, reflecting our go-forward organizational structure. The Protein Solutions segment includes businesses serving the initial stages of processing and harvesting of animal proteins. Prepared Food & Beverage Solutions segment predominantly focuses on downstream value-added preparation, preservation and packaging of foods and beverages into ready-to-eat or drink products.

Now moving to a discussion of our results. Full year consolidated revenue of $3.8 billion exceeded the high end of our guidance as we successfully converted backlog to revenue, experienced solid demand for service and aftermarket solutions and continue to benefit from recovery in the poultry industry. The favorable year-over-year foreign exchange translation impact of $77 million was in line with our expectations. On a segment basis, revenues were $1.7 billion for Protein Solutions and $2.1 billion for Prepared Food & Beverage Solutions. For the year, we generated consolidated adjusted EBITDA of $600 million, representing a margin of 15.8%, which was at the midpoint of our guidance.

On a segment basis, adjusted EBITDA margin for Protein Solutions was 20.1% and Food & Beverage Solutions margins were 17.2%. Overall, we delivered synergy savings as forecasted, realizing a $43 million year-over-year benefit, while we exited the year with run rate savings of approximately $85 million versus our 2024 baseline. Our savings were primarily driven by the initial efforts related to streamlining our organizational structure, optimizing public company and overlapping third-party costs and consolidating our spend with our supply base. Based on our solid execution for the first year, we are confident in our ability to achieve our goal of generating $150 million of run rate synergy savings as we exit 2027.

Offsetting some of the synergy benefits was the impact of the higher tariff environment that we have experienced since April 2025. The cost to JBT Marel for the year was approximately $43 million, which is net of $15 million of cost avoidance through supplier negotiations and other cost mitigation efforts. After pricing actions, we estimate tariffs had an approximately 50 basis point impact on adjusted EBITDA margins in 2025. As forecasted, fourth quarter adjusted EBITDA margin of 16% declined sequentially due to the acceleration of tariff costs, along with investments we made to support our growth plans for 2026. Full year 2025 adjusted earnings per share was $6.41.

As Brian pointed out, we are extremely pleased as this represents first year earnings accretion relative to legacy JBT's 2024 adjusted earnings of $6.15 per share. Turning to the balance sheet. When we completed the JBT Marel transaction in January 2025, our leverage ratio was just below 4x. At that time, we had a goal of bringing the leverage ratio down to 3x at year-end 2025. In fact, we ended the year with a leverage ratio of less than 2.9x, demonstrating the earnings and cash flow power of the combined company. Looking ahead to full year 2026, we expect healthy year-over-year growth in revenue, margins and earnings.

Our consolidated guidance includes revenue growth of 5% to 7%, including a 1% foreign exchange benefit. Adjusted EBITDA margins are estimated at 17% to 17.5%. That represents year-over-year improvement of 145 basis points at the midpoint, with margin progression anticipated for both Protein Solutions and Prepared Food & Beverage segments. Included in our adjusted EBITDA guidance is the ongoing impact of tariffs, including Section 232, which remains in place. With the recent Supreme Court news on base reciprocal tariffs, we have begun to assess the potential impact this will have on our cost structure in 2026, and we will continue to monitor what appears to be a constantly moving target.

Currently in our forecast, we have included approximately $45 million of higher full year tariff costs before pricing actions, with most of the increase occurring in the front half of 2026. Independently, we will continue to execute on our synergy savings, which we expect to realize year-over-year benefit of approximately $60 million.

With that, we project adjusted earnings per share of $8 to $8.50 in 2026, a year-over-year increase of 29% at the midpoint, driven by EBITDA improvement and lower interest expense from the successful deleveraging of our balance sheet and low-cost capital structure. GAAP earnings per share guidance is expected to be $4.70 to $5.15. For the first quarter, which is typically our seasonally slowest, we are forecasting revenue of $920 million to $940 million and adjusted EBITDA margin of 14% to 15%. At the midpoint, this represents year-over-year growth of 9% in revenue and adjusted EBITDA margin improvement of 150 basis points.

With that, let me turn the call back to Brian.

Thanks, Matt. As Arni and Matt detailed, we executed well against our synergy plan for 2025. Looking forward, we expect to realize incremental benefits from supplier consolidation and value-add engineering projects designed to take out parts complexity and cost. We will also continue back-office resource optimization and have a road map for select manufacturing and distribution footprint rationalization. This allows us to leverage previous investments made in state-of-the-art distribution and low-cost manufacturing, further improving customer service and our cost position.

We got off to a great start in 2026 with our presence at IPPE, the world's largest poultry expo. For the first time, JBT Marel's full integrated solutions were on public display, which demonstrated the value of our comprehensive product portfolio. Customers' response to the benefits of our integrated systems, service connectivity and know-how was very positive. Given the conversations about demand trends with poultry industry leaders, we have confidence in the continued investment momentum, including renewed investment on the prepared food side. That, combined with favorable economics of the industry, makes us optimistic that the strength in poultry equipment demand will continue into 2026.

As you can see, we are excited about the growth path ahead. We plan to provide further details on our strategic growth priorities and financial targets at our upcoming Investor Day, which will be held on Thursday, March 26 in New York City. A live stream webcast and replay of the event will be available on our IR website. Meanwhile, I am very proud of the progress our organization has made in achieving our first year goals for the integration of JBT and Marel. We are capitalizing on our enhanced customer value proposition and scale.

And financially, we achieved the objectives we established. Of course, none of this was easy, requiring hard work and deep commitment at all levels of the organization. To our teams across the globe, thank you. Together, we are transforming the future of food.

Now let's open the call to questions. Operator?

[Operator Instructions] Our first question comes from Ross Sparenblek with William Blair.

Maybe just starting off with the order dynamics in the fourth quarter. Can you give us a sense of what end markets stood out? It seemed like AGVs are maybe flat in the third quarter. We're starting to kind of turn into 2026, whereas the fruit and vegetable looks like it's down for the year. I don't know if that's expected to continue.

Sure. I would say, generally speaking, poultry remains the leader across all of our categories. and I would say, followed by beverages in 2020 -- as we ended the year 2025. Meat remains supportive as does fish. And we're starting to see some real momentum on the pet food side as well. And as you suggested, we do expect a nice recovery in AGV as we go into next year.

So as we think about our ending backlog, we feel really good about the position we're in. And to further emphasize the poultry side, so when you look at our poultry orders, typically, and it was a very strong year, as you saw, Typically, that's somewhere in the range of 75% that goes to the poultry segment and then about 25% typically would go to the Prepared Food and Beverage segment. So it covers both segments just for informational purposes. And again, I think what we're going to see is continued investment on the front end and increased investment on the back end on the Prepared Food side.

Okay. That's helpful. And then maybe just, Matt, in the fourth quarter, did you guys call out the synergies between the R&D and SG&A? And then also, can you just maybe provide the expectations for R&D and SG&A for 2026?

Yes. We did not call out the synergies specifically to either R&D and SG&A. I mean -- but in general, the synergy savings that we saw in 2025 was predominantly in the SG&A part of OpEx, not in R&D. Going forward, our -- we split out SG&A and R&D in our segment disclosures. So you'll see that in the K going forward, but we aren't providing that guidance as a percent for 2026.

The one thing I would just add on the -- sorry, just real quick, Ross, one thing that we are doing on the R&D side is harmonizing the accounting treatment between the 2 businesses, legacy businesses. So you'll see a little bit different structure. Quite a bit of JBT's -- legacy JBT's R&D, if you will, was in cost of goods sold. and whereas Marel is kind of all in one spot. So we're going to re-harmonize that according to GAAP. We made that change in Q4, and we'll make that adjustment quarterly, yes.

Okay. So this is the first quarter where we're going to have a full apples-to-apples as we think about...

Yes. Q4.

Our next question comes from Mig Dobre with RW Baird.

Just looking at the new segment reporting structure, maybe a couple of points of clarification here. I don't know if I missed this, but when you're thinking about the top line growth for '26, is there a way to differentiate between Protein Solutions and Prepared Food & Beverage? And related to this, I would imagine that a lot of the margin expansion that's factored into the overall guidance would flow through the Protein Solutions segment just because optically, it looks to me like this is where a good chunk of the Marel business is now housed. Do correct me if I'm wrong there? And maybe you can comment a little bit about margins perhaps for both segments. .

Yes, Mig, on the first part of your question on revenue for 2026, again, we're guiding to a 5% to 7% range overall. And for Protein Solutions, it's probably at the higher end of that range and for Prepared Food & Beverage, probably at the lower end of that range, which kind of gets you to that midpoint that we have in our forecast. And then from a margin perspective, we're expecting to see margin improvement in both segments, obviously, from the benefit of the higher volume as well as from the continued benefits from the synergy actions that we are taking.

To be honest, they're relatively the same in terms of improvement with slightly higher improvement actually in Prepared Food & Beverage just because of some of the impacts that we saw at the end of 2025. We're correcting some of those issues and getting a little bit better flow-through in 2026.

Got it. And you anticipated something else I wanted to ask about. You called out some -- maybe some inefficiencies in prepared food and beverage. Can you put a finer point on this in terms of what's been going on there? Is this the legacy JBT business? Is there something else? And what's the line of sight on getting that improvement operationally there?

Yes. As we somewhat forecasted in the last call that we had after Q3, we did have some challenges primarily on the AGV side. And we did see that impact us in Q4 as we predicted. And A lot of that is driven by some of their impacts from the end market from the higher tariffs, and that's impacting them more significantly just because they have a little bit of a more broader end market focus than the rest of the business. But we expect to see our ability through that -- those issues through Q1 and early Q2. So it should be relatively contained the first quarter, maybe a little bit bleed into the early part of the second quarter.

All right. My final question on tariffs. So you sized the drag for 2026, but that was, as I understood it, sort of the gross number, it's ex pricing or any other mitigation. And I'm sort of curious, how are you thinking about pricing? I mean, are you in a position where a good chunk of this figure can actually be mitigated as the year progresses or not?

Yes, Mig, it's Brian. So we have included in our forecast some mitigation on the pricing side. We do think that there will be still some net negative benefit perhaps in the 25 basis points range for the full year, maybe somewhere between 25 and 50 basis points. It really kind of depends on the status of the markets, right? We don't feel it's 100% on the customers' backs to take on these cost increases. So we're doing everything that we can on the cost side to mitigate that. So we'll continue to do that. But we are intentional -- we'll be intentional on select price increases where we think it's supportive from the market perspective.

Our next question comes from Justin Ages with CJS Securities.

Just a question on capital allocation. Good progress on getting leverage below the target for the first year here. Just wanted to know how you guys are thinking about what to do with the capacity with the convertible coming up in May. Any detail there would be helpful.

Yes. Well, let me start. I'll just say this, we are laser-focused on completing the integration, right? We still have some time to go there. So we don't want to get ahead of ourselves. We certainly want to get into that 2 to 2.5x leverage range before we start thinking seriously. That said, and I'll let Arni elaborate a little bit, there will be a time when we think we can get some of the benefits of what we've done on the protein side in other areas of the business.

Yes. And I mean, how we are thinking about it and it kind of feeds through our messaging all along and the strategic rationale for the merger of JBT and [ Marel ] is, we see a lot of benefit when we have a broader portfolio that is serving an end market or a particular customer. So those kind of integrated lines and integrated solutions, that's where we see where the customer needs are, the opportunity to improve the operation of our customers and improve the value proposition.

So kind of as things evolve and kind of we feel the timing is right, kind of as Brian said, kind of you can -- that's kind of an area that we'll probably be very much focused on to look at kind of where are the opportunities to strengthen our value proposition and be able to work better with our customers to partner with them on their journey.

Justin, just to touch on 2026 specifically, we did the convertible in September of 2025 to prefund the financing to retire the notes in May. So we're in a really good position here. We expect to be able to leverage the liquidity that we have on our revolving credit facility to be able to take out the convert that plus the cash flow that we will generate this year, we do expect all things sort of staying the way they are, that we'll be in the range of 2 to 2.5x leverage by the end of 2026. And then we'll see where we go from there from an M&A perspective, like Brian and Arni discussed.

Very helpful. And then switching to tariffs. Can you give us a little more detail on where you are in the supply chain regionalization? I know you mentioned looking at some factories in the U.S. And then along with that, can you also comment on -- and I know it's a moving target, customers and their orders being impacted by this kind of moving tariff regime?

Sure. So from a supply chain perspective, it's still relatively early days. We have already started moving parts suppliers. to -- from Europe to the U.S. where it's feasible. That takes a little bit of time just with product testing and first articles, et cetera. So that's further along, if you will. From a manufacturing side, we certainly are very busy filling our backlog. So we are starting that process as well. So that will be a continuum during the course of 2026. But I don't think we will be complete with that until more likely the 2027 time frame.

Yes. And just to kind of emphasize like we do have, for example, on the poultry side, we do have a plant that kind of mirrors in the U.S. that mirrors a plant in Europe. So that's where we can kind of move faster, which is kind of really good because of how the poultry market is evolving. So that's kind of an area that we can maybe get some short-term benefit. But obviously, if you want to do more structural things, it will take longer. And then we also have strong distribution centers regionally in the U.S. that we're leveraging more and more directly for the local market.

On the parts side, in particular.

Your next question comes from Walter Liptak with Seaport Research.

I wanted to ask about the sales synergies for 2025. Was that to your expectations at $30 million? And do you have a guidance number or an expectation for 2026?

Sure. As we mentioned on the prepared remarks, it did -- the benefits on the synergies revenue side did accelerate through the year. And it's essentially as you might think, right? You get the organizational structure in place first, then you start training, get marketing, and it really did pick up through the course of the year. So again, $30 million with approximately half in the fourth quarter alone. So I would -- and that will convert to revenue in 2026.

So I would say we are ahead of pace on our original $75 million cumulative revenue synergies by 2027. We haven't put a new number out there, but we will as part of the Investor Day at the end of March. But clearly, we're ahead of pace.

[Operator Instructions]

There are no further questions at this time. I will now turn the call back to Brian Deck for closing remarks.

Thank you all for joining us this morning. As always, the IR team will be available if you have any additional questions, and I look forward to seeing you at our upcoming Investor Day.

This concludes today's call. Thank you for attending. You may now disconnect.

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Good day, everyone, and welcome to JBT Marel's Earnings Conference Call for the Third Quarter of 2025. My name is Jim, and I will be your conference operator today. And as a reminder, today's call is being recorded. [Operator Instructions] It is now my pleasure to turn the call over to JBT Marel's, Senior Director of Investor Relations, Marlee Spangler, to begin today's conference.

Thank you, Jim. Good morning, everyone, and thank you for joining our third quarter conference call. With me on the call is our Chief Executive Officer, Brian Deck, President, Arni Sigurdsson, and Chief Financial Officer, Matt Meister.

In today's call, we will use forward-looking statements that are subject to the safe harbor language in yesterday's press release and 8-K filing. JBT Marel's periodic SEC filings also contain information regarding risk factors that may have an impact on our results. These documents are available in the IR section of our website. Also, our discussion today includes references to certain non-GAAP measures. A reconciliation of these measures to the most comparable GAAP measure can be found in the IR section of our website.

With that, I will turn the call over to Brian.

Thanks, Marlee and good morning. As you saw in our earnings release, we significantly exceeded our expectations for revenue and earnings in the third quarter of 2025. Primary drivers of our outperformance were excellent manufacturing and supply chain productivity, which enabled higher backlog to revenue conversion, a favorable equipment mix and an acceleration of synergy savings.

In light of our strong third quarter performance, we have raised our guidance for full year 2025. At the same time, demand remained healthy with combined JBT met orders of $946 million, an increase of 7% from the prior year period. In particular, we experienced continued equipment investment from the poultry industry our largest end market, and our pipeline for poultry-related projects is expected to provide support well into next year.

Beyond poultry, orders from pet food and pharma were robust in the quarter. In the ultimate display of the benefits of diversification, we took 2 large orders in support of a major pharmaceutical firms investments in GLP-1 production capacity. Geographically speaking, demand was strong in North America. While Europe and Asia were softer sequentially, we enjoyed a good quarter in Latin America with some large pet food, poultry and juice orders. We ended the quarter with a backlog of $1.3 billion.

That, coupled with our resilient recurring revenue provides visibility for the remainder of the year and support as we enter 2026. Additionally, as Matt will discuss, we made further progress on deleveraging our balance sheet. And as Arne will highlight, the integration of JBT Marels remains on track as we take actions to capture synergy savings and enhance our value proposition to customers. I will come back at the end and talk about a few ongoing initiatives that will make JBT Marel an even stronger partner to our customers over the long term.

Let me turn the call over to Matt to discuss our third quarter performance and revised outlook for the year.

Thanks, Brian. For the third quarter of 2025, total revenue was approximately $1 billion, an increase of 7% sequentially. We exceeded our revenue expectations by approximately $65 million as we benefited from excellent manufacturing and supply chain productivity, which allowed us to convert approximately $45 million more backlog to revenue than originally expected.

Additionally, we had about $20 million in higher book and ship revenue in the quarter compared to our expectations. Revenue in the quarter included approximately $26 million in favorable year-over-year foreign exchange translation impact, which was in line with expectations. Our third quarter adjusted EBITDA margin of 17.1% exceeded our expectations by about 140 basis points. Beyond volume flow-through, margins were better than we forecasted due to favorable mix of poultry equipment and shorter-cycle products, coupled with better-than-expected synergy savings.

For the quarter, we realized year-over-year synergy savings of $14 million. Third quarter GAAP EPS was $1.28, and adjusted EPS was $1.94. Adjusted EPS excludes certain onetime items and acquisition-related costs, which were outlined in yesterday's press release and investor presentation. As it relates to the tariffs, based on what is currently understood, we still believe in the quarterly impact of JBT Marel's material costs.

Before any mitigation efforts would be in the range of $22 million to $25 million. Because of our cost mitigation efforts, the net tariff impact before any pricing actions was approximately $15 million in the quarter, slightly less than anticipated. We expect the net cost impact before pricing actions to increase to about $20 million in the fourth quarter, with the increase primarily due to recently enacted additions to Section 232 tariffs.

In the immediate term -- in the intermediate term, we will look to increase the utilization of our domestic facilities for production and assembly and further localize JBT Marel's supply chain. In terms of the additional proposed Section 232 tariffs related to the import of robotics and industrial equipment under consideration. As we currently understand the scope, we do not include equipment associated with food production. Therefore, while we may see some modest component cost increases, we do not expect a material impact on JBT Marel. As we progress further into the integration of JBT Marel and are successfully operating as 1 combined entity, the allocation of revenue and expenses between the legacy companies is becoming less meaningful.

As such, during the fourth quarter of 2025, we plan to introduce our new segment reporting, which reflects the way we will operate the business. The new segments will be protein solutions and prepared food and beverage solutions. Protein solutions will include the JBT Marel businesses that focus on initial stages of processing and harvesting of animal proteins. The Prepared Food & Beverage Solutions segment predominantly focuses on the downstream value-added preparation, preservation and packaging of foods and beverages into ready-to-eat or drink products.

In order to provide comparability, we will recast historical annual results for 2023 and 2024 and quarterly results for 2025, plan to make those historical financials available prior to the release of our fourth quarter and full year earnings. In terms of our third quarter segment results, segment revenue of $465 million increased approximately 2%, both year-over-year and sequentially.

JBT segment adjusted EBITDA of $71 million decreased 13%, both year-over-year and sequentially, with an adjusted EBITDA margin of 15.3%. The decrease in margins is the result of unfavorable mix of equipment one-off project variances and a higher share of corporate-related costs carried in the JBT segment. Marel segment revenue in the third quarter was $537 million, an increase of 12% sequentially. Marel segment adjusted EBITDA was $100 million, representing a margin of 18.6%. Marel's strong profitability in the quarter was a result of favorable mix from higher-margin poultry equipment integration synergies and volume leverage as well as continued improvement in the fish and meat businesses.

Through the first 9 months of 2025, we generated operating cash flow of $224 million and free cash flow of $163 million. For the third quarter, we achieved record quarterly operating cash flow of $88 million for the combined company. We continue to make significant progress on deleveraging our balance sheet. From an initial leverage ratio of 4x at the close of the combination. At the end of the third quarter, our financial leverage decreased to 3.1x. And by year-end, we expect that our leverage will be below 3x. Previously announced in the quarter, we completed the issuance of $575 million of senior convertible notes with a coupon of 37.5 basis points due in 2030. The notes enable us to prefund the upcoming May 2026 convertible notes maturity at a lower interest expense relative to high-yield debt. And with the call spread, we have effectively mitigated shareholder dilution until the share price reaches approximately $283.

As Brian mentioned, we have increased our guidance for full year 2025 to reflect the strength of our third quarter results. We are expecting revenue between $3.76 billion to $3.79 billion, including approximately $70 million to $85 million and favorable year-over-year foreign exchange translation effect. We are forecasting full year adjusted EBITDA margin to be 15.75% to 16% and adjusted EPS of $6.10 to $6.40.

For full year 2025, we now anticipate in-year synergy savings of $40 million to $45 million, slightly above our previous target and run rate savings of $80 million to $90 million as we exit the year. We remain on track to achieve annual run rate savings of $150 million within 3 years of the combination.

Let me now turn the call over to Arni, who will discuss the progress and specific benefits we are realizing as a result of the business combination and integration.

Thanks, Matt. It is clear that our results demonstrate the benefits of TBT models, complementary solutions, diverse end market participation, increased scale and continuous improvement efforts. As Matt said, we have increased our estimates for in-year realized synergy savings, a testament to the disciplined execution of our integration plan and the dedication of our team. For example, on the supply chain side, we are actively realizing synergies by rightsizing our supplier base and optimizing our procurement strategies as JBT Marel.

That is with the goal of improving terms, quality, delivery and pricing. We recently renegotiated our air and ocean freight contracts, reducing the number of suppliers for more than 150 to 5. Given these efforts, we expect to capture more than $5 million in annualized cost savings, a very meaningful number. Following the implementation of our new organization in the second quarter, we have also continued to capture operating expense savings. This includes consolidating contracts, the sales and service office footprint and third-party spend across our finance, legal and IT departments. During the quarter, we inaugurated a new global production center in Puno, India, with a full new JBT Marel branding. The location Precision India as key expert up and brings JBT models application expertise to the broader Asia Pacific region.

Our global scale provides the flexibility to produce products in the region where our customers are located, adding optionality as tariffs continue to evolve. We now have dedicated low-cost manufacturing platforms in Asia, Latin America and Eastern Europe to support in-region profitable growth. As we outlined in our last call together, JBT and Marel are an even more valuable partner to our customers.

We achieved that with our customer-centric approach, with futures account managers representing the entire portfolio, our expanded service network and food line solutions and process know-how across the value chain. We can simplify the buying process, installation and service for our customers and provide a [indiscernible] accountable vendor. In our conversations with customers at trade shows and on specific projects, it is clear that they recognize the value of our expanded capabilities. A good example is a recently secured hamburger line order, which includes meat preparation, forming, weighing lean measurement, freezing and software from the JBT and Marel portfolio. Sustainability also remains top of mind for the food and beverage industry.

At JBT Marel, sustainability is embedded in who we are as an organization. During the third quarter, we published JBT Marel's first joint sustainability report. In it, we discussed how we deliver sustainable and efficient outcomes for our customers through application expertise and leading technology. And that focuses on minimizing food and packaged waste, lowering energy and water usage and improving food traceability and safety. I'm proud of JBT Marel's role in advancing sustainability as we transform the future of food.

With that, let me turn the call back to Brian.

As you heard from Arni's remarks, we are making excellent progress on the integration and have delivered quantifiable benefits in terms of supply chain and operating expense savings. And there is more to come as we enhance our holistic solution offerings with an emphasis on service and digital capabilities. For example, as we have discussed over the past several years, our software and digital platform further enhance JBT Marel's value proposition, providing control and connectivity that improved performance across the system and optimizes machine yield, throughput and uptime for our customers.

Similar to our equipment portfolios, JBT and Marel's digital ecosystems are complementary. We have now combined our digital teams and have aligned our technology infrastructure platform. We continue to work on how to integrate the customer software interface, feature content as well as the development of the intermediate-term technology roadmap.

Our goal is to provide a path forward that offers the best technology specifically designed for the needs of the food and beverage industry without disruption to our customers. We are also engaged in the process of integrating our service resources and capabilities. And in addition to leveraging our expanded reach, Core to our strategy is continually enhancing the quality of our service offering and as such, are instituting a rigorous customer-facing performance measurement system.

We recognize that essential part of the JBT Marel value proposition is the reliability, responsiveness and quality of our service and parts offering and strive to provide customers with best-in-class performance. This development of our software solutions and the performance of our service and parts franchise go hand-in-hand as we further our integrated value proposition with our customers.

As we approach the end of our first full year as JBT Marel, I believe our commercial success and financial performance have reinforced our conviction that we are better together. Our complementary portfolio of solutions, enhanced service capabilities and global footprint are making us an even more valuable partner to our customers.

Internally, we have continued to optimize our operating efficiency and productivity. And our strong cash flow has enabled us to quickly delever our balance sheet and provides the liquidity to support our growth strategy. My heartfelt thanks to our teams around the globe who have enabled JBT Marel to bring greater value as we transform the future of food.

Now let's open the call to questions. Operator?

[Operator Instructions] We'll take our first question today from the line of Mig Dobre at Baird.

Joe Grabowski on for Mig this morning. I wanted to start with the morale EBITDA margin in the quarter really impressive actually 330 basis points over the core JBT EBITDA margin. And even if we back out all of the $14 million in synergies from Marel, it's still above core JBT. I know you mentioned in the prepared remarks favorable mix and some improvement in meat and fish, but maybe drill down a little further as to what's driving that EBITDA margin is much higher than where they were pre-acquisition.

Sure. Yes, we're really proud of the performance of the legacy Marel business in the third quarter. Specifically, as we mentioned, we got a lot of volume through the system in the quarter and get a lot of operating leverage out of that. That was, first and foremost, the benefit that we saw and moreover, the higher share of synergies, as you mentioned, the reduction of the corporate overhead has benefited the Marel segment and [indiscernible] just continued to improve. And just further to the topic, one of the things we've talked about over the years -- over the last 2 years, as we've considered this opportunity is the strength of the morale technology. And that really starts to come through as you build your volume and get -- and as the market improves.

So that's really just starting to come through really strongly in the quarter. So -- there was a lot of opportunity with the more margins that we just saw that really good execution on both the commercial side and on the factory side.

Got it. Okay. Great. That's very helpful. And then my second question, I guess, -- you raised your full year EBITDA guidance at the midpoint by $20 million. It seems like Q3 maybe came in at least $20 million above where you were expecting. So maybe talk about some of the moving pieces in 4Q, you had some additional revenue out of backlog in Q3. Did that -- is that going to impact Q4. Tariffs, synergies, just kind of moving pieces for 4Q versus your expectations 90 days ago?

Sure. I'll talk a little bit about the commercial side and have Matt talk about the cost side. So we do expect lower revenue in the fourth quarter relative to the third quarter. So some of the cadence and the flow-through of that operating leverage and the profits on that lesser revenue flows through. The primary reason for that is -- we did have a bit of a pickup in the third quarter just as it relates to, as I mentioned, some productivity and supply chain improvements.

So there were some things in, I'll say, in our backlog that were stuck on the port because of some of the issues with tariffs and whatnot. We cleared a lot of that up. So that allowed us to get a little bit extra volume in the third quarter that we don't expect in the fourth quarter. And on the cost side...

Yes. I think on the cost side, we do expect to see a bit of a ramp on the tariff expense impacting margins in Q4 with additional 232 tariffs that should have an unfavorable impact on margins sequentially.

In addition to that, as Brian said, we did see some supply chain benefits that impacted Q3. We don't expect that to recur in Q4. So there's a little bit of sort of a onetime impact from those supply chain benefits that doesn't recur sequentially in Q4.

And then just lastly, as we think about 2026 and thinking about our growth trajectory for there, we will make a little bit of investments in preparation and in commensurate with that expected growth.

Got it. Okay. And if I could maybe just sneak in one more. If you could talk about just how automation is trending through the business as we progress through the year?

Yes. Automation remains a key theme for us, particularly on the protein side as we see pressures on the labor environment for the food factories the area that we see the biggest opportunity in seeing a good -- we saw a good amount of orders in the third quarter and expect that trend to continue in the fourth quarter is what we would call the secondary side.

So that is where you typically would see slicing and dicing and removing meat from the bone, so to speak. That is the biggest opportunity, clearly on the protein side. We see similar challenges of labor availability on cutting up things like fruits and vegetables, anywhere where there's humans involved in things that are typically well suited for dexterity and precision. But as the technology continues to evolve and with the combination of our portfolios together, we have a great offering on that secondary space.

So that does continue to play out as we had hoped.

Next question today comes from the line of Ross Sparenblek at William Blair.

Maybe just starting with the order book. Can you give us a sense of any cross-selling orders to call out and maybe help us size that as we think about the revenue synergy capture?

Yes. I mean -- this is Arni here. I mean what I would say is we continue to see improvement in our pipeline on the cross-selling opportunities. And we feel kind of very, very good where we are. I mean I highlight one particular order in the prepared remarks, for example, where we had a hamburger line -- and what -- as we look through some of the pipeline and the opportunities that we have there, we're very pleased with the mix that we're seeing.

We're seeing kind of all the way from kind of current JBT customer, not a modern customer we're selling there and having opportunities there, Vice versa and kind of the main themes that I would kind of maybe give you a little bit of color on kind of the freezers are being bundled a lot into some of the convenience lines that we have. And then -- we also see a lot of like the fryers with the [indiscernible] on the model side.

So I would just say, overall, we're pretty pleased with where we are considering the pipeline.

Okay. So I mean you get the sense -- I mean it sounds like it's expanded in scope here just outside of the obvious moats around the poultry side?

Yes. I would say it is general. I would not say it's going to very different from expectation. We do -- we've obviously been quite focused on the poultry side just due to can have the strength of that market and also kind of our position in that market.

So for example, we're seeing kind of the combination of the DSI water cutter and the SensorX bone detector that's a very good combination. But we're also seeing it kind of more broader. And then we see kind of some things that we didn't expect. We've sold to kind of have some FTN non-equipment into the fish industry and so on. And these happen as well kind of something you don't plan for -- but overall, I would say it's broadly in line with expectations, but we're very pleased with how we're going to consistently building up a stronger pipeline.

And just to add to that a little bit. As we mentioned in previous quarters that as we move to this account management model, which allows our sales force to sell the entire portfolio over the last 2 quarters, there's been a tremendous amount of discovery of the legacy morale salesmen understanding the depth and the breadth of the JBT portfolio and vice versa.

So as that discovery occurs and you start to experiment and realize that there's application that we could apply that we hadn't even thought of that is starting to come through. So we're feeling really good about the cross-selling and the synergistic sales as we go into 2026.

Maybe one more in here. Brian, when we last spoke last quarter, it sounded like you had 12 months of visibility in poultry and you take the share gains out of it and just think about end-market demand. Where is your visibility today? And what do you hear from your customers as pertains to pork, fish and the other protein markets as well?

Right. So I would say that strength, we still see continuing well into 2026. It's hard to precisely say how long that's going to last. But for sure, the market is strong. And really, what we're seeing is, I think we've talked about quite a bit is again, and it's not just poultry, we're seeing some improvements in pork and fish, but upholstery does continue to lead the market.

But again, as we see the cash flow and the strength in the in our customers, they do have a fair amount of, I'll say, longer-term plans to get the benefits of greenfields and line expansions, et cetera. There is some -- there was many couple of years of deferred investment. So we do see that coming through here in 2026.

And frankly, we're already quoting into 2027.

Our next question today will come from Saree Boroditsky from Jefferies.

Starting off, building on the morale margin question. One of the items you highlighted with improvement in meat and fish. I believe those product lines had lower margins at the time of acquisition. So just curious if you could provide some color on the improvement there and some of the actions you're doing to raise the margins.

Yes. So I mean like we've talked about previously, I mean one of the areas that we've been focusing on is One of the tools that we have is 80/20 analysis. So basically looking at kind of what are your -- what are the top 20 products that you have that represents 80% of the volume. And you can look at that through different lenses, kind of whether it's geography, customers, products and so on.

So it's really looking at and trying to understand -- where are you kind of well positioned, where you kind of have the right resources, the right margin, so you can actually take the appropriate actions and resource the different value streams appropriately. And so what we have found out through that is really kind of figuring out what is the right resource level, then we're also looking at kind of where are the projects where we're more challenged in terms of variances or kind of differences between kind of what we expected to achieve and what we actually achieved. And then we were taking appropriate actions there as well. So we're actually really focused on improving profitability and less so on driving top line growth because we want to build the foundation there and then be ready to build on that profitable foundation to grow the business instead of continuously growing an underperforming business.

And that's really kind of where the focus has been -- and I think it's nice that we'll be kind of reaching that kind of foundation as the market is starting to kind of stabilize and gradually improve. And I would say we saw some improvement in Q3, and we're very confident on our journey to reach mid-teens margins for those businesses in 2027.

I appreciate on the color on those. I think you mentioned a couple of times 2026. I mentioned investing ahead of growth along with the support of backlog. So could you just talk through any early thoughts on the growth outlook for 2026 and your visibility into this?

Right. It's a little early to be giving revenue color for and growth come for 2026, but I will say this, and I'll have Matt talk a little bit about the backlog. We do have fairly decent visibility given the strength of our backlog. As we just mentioned a moment ago, the markets are are supportive. Certain markets are very supportive in certain markets, less so. But overall, it's a healthy demand environment. So we do expect 2026 to be a growth year, and we'll provide more specific on that.

Yes. Just to build on that, I mean, where we're at with our backlog as we exit Q3, that, coupled with where we see our order pipeline and the strength and resiliency of our recurring revenue. As we exit Q4, we're expecting to have visibility above 70% to the 2026 revenue. And that, as Brian said, is inclusive of growth in 2026. So we feel very good about sort of where our pipeline and backlog sets to support a growth year in 2026.

And I guess squeeze one more in. Obviously, you're going to be reporting in 2 different segments. Just curious how those 2 categories differ from a growth and margin perspective or just any differences in how they go to market.

Right. So they will actually be relatively similarly sized and relatively similar margins. We'll get -- we're working through all those details as we speak. So I don't think you're going to see huge differences. I think that the general outlay is that the protein solutions will be more, I'll say, legacy morale weighted and the prepared food and beverage solutions will be a little bit more, I'll say, legacy JBT weighted.

But both should be decent margins and overall growth profile. So we'll give more color on that. As Matt said in the prepared remarks, before we issue our 10-K and our Q4 earnings, we'll provide all that detail so you can get all the history and be well prepared as we go into that earnings call.

Our next question today will come from the line of Walt Liptak at Seaport Research.

I wanted to ask about selling prices and just kind of the tariffs. I wonder if you could talk first about third quarter and if you could parse out kind of the volume versus price that you got for JBT and Marel and how are you guys doing like the fourth quarter headwind with tariffs? Is that surcharges? Or is that special tariff pricing? How does that work?

Sure. So as -- so I would -- first of all, let me tell you that the revenue in Q3 was overwhelmingly on the volume side. There was some pricing benefit because as we mentioned earlier, we enacted price increases in the second quarter in anticipation of some of the flow-through from the tariffs. So -- so there are some pricing benefit. And then obviously, year-over-year, there's some FX benefit, which we have outlined, but really was a volume play in the third quarter here. As we go into the fourth quarter, as Matt mentioned, we'll see an extra $5 million or so on the cost side in connection with the Section 232 incremental tariffs that are out there.

Things are starting to stabilize, it seems, absent any new news. But -- so we continue to price into our projects themselves, everything that we know about tariffs today. As relates to the parts, we'll just keep an eye on it. If we see incremental issues or outsized issues as late -- for the cost side, we'll consider it, but we did do a price increase. We think we're in decent shape, and that's all reflected in the guidance for the fourth quarter.

Okay. Great. And it sounds like you're making some some more permanent shifts, if I heard that right, with the manufacturing footprint? Have you started those? What's the timing of that? And what's the timing of unexpected benefits.

Yes, we have started. That does take -- that will take some time overall. However, where we have what I would call sister plants -- so for example, on the poultry side, we have a facility in Boxer Netherlands, and they have a sister plant in Gainesville, Georgia. So we have, I'll say, already a supply chain established. So it allows us to move more volume than we otherwise might absent tariffs, into Gainesville.

So that's happening, and that's relatively in the grand scheme of things easier to do. Longer term, we're looking at where we can, again, utilize and further develop that supply chain for some of our other facilities. So that will take 2, 3, maybe 4 quarters as we consider that. So it's -- I would say it's a mix of things we can do quickly and other things that will take a few quarters.

And next, we'll hear from the line of Justin Ages at CJS Securities.

Shifting topics slightly. I know it's smaller, but any update on the AGV business? How is it doing? How you guys are thinking about that business?

Sure. Yes. So as you know, the AGV business is in a tremendous market in terms of all the trends as we see on factory automation, warehouse automation is they're big end markets. So longer term, very, very strong. The third quarter wasn't their best quarter. That was 1 of the businesses that was more affected by some of the tariffs and some handful of delayed orders in revenue. However, we're expecting a strong fourth quarter here in terms of demand and into 2026.

I appreciate the color. And then one more on the tariff mitigation. I know you've had some price increases out there for a bit. Are you seeing any pushback on repricing, any order cancellations or anything along those lines?

Yes, we've been very balanced as it relates to really looking through the eyes of our customers where it's fair. As you know, we -- you could see from our remarks that we are eating some of the tariff impact. So I think we're being fair with our customers. And so from the order side, our orders remain strong. So we feel we've done a nice job in that balance of, I'll say, sharing some of the pain. And then as we go into 20 we feel really good about our position with our customers.

And that was our final question from the audience today. Mr. Deck, I will turn it back to you, sir, for any additional or closing remarks that you have.

Great. Thanks, everyone, for joining us today. As always, if there's any questions, please direct them to Marel's [indiscernible]. Have a great day.

Thank you, ladies and gentlemen, for joining today's session. You may now disconnect your lines. Have a great day.